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How to Teach Your Kids to Be Responsible with Money

toy cash registerWhen parents think of the important talks they’ll have with their children, they usually think about subjects like sex, death, and religion. However, very few consider financial responsibility and money. Why not?

Children don’t really understand the meaning of money, which is why the money talk is important, especially with regards to the consumerist society we live in.

Of course, most parents aren’t really sure how to start such a conversation. When kids see currency pop out of an ATM, they don’t realize their parents had to earn it, and that cash is a finite resource; as such, it’s challenging to discuss money from their limited perspective. That being said, there are some exciting ways to familiarize your kids with the concept of money and financial responsibility. Here are four of them:

Things Cost Money

First and foremost, kids need to understand that nothing in this world comes for free; in one way or another, you need to pay for everything. So, instead of just saying that something costs a certain amount of money, you need to show your children an exact example. For example, start with a piggy bank or a savings jar. Consider paying your kids for their chores with the condition that a percentage of what they earn must be saved in their piggy bank. Every time they reach, say $10 in saving, allow them to take their savings and spend it on something they want — or need. For example, savvy teenagers may even decide to spend some of their savings on something like a custom thesis writing service for a help with a dreadful assignment. This exercise is a great way to demonstrate the benefits of hard work and saving for wants and needs.

The Value of Saving

Of course, it’s not only essential to show your kids the fact that things costs money, but also the value and benefits of delayed gratification. Most kids figure that when they get some money for their birthday or a special holiday, they also “have” to spend it. If there is something they want — like a toy, a game or some sweets — don’t encourage them to buy it right away. Instead, persuade them to save their money for a few weeks. Doing so will teach them the value of saving and making more significant purchases.

Money Boundary

According to Money Prodigy, when teaching children about finances and money, it’s essential to establish clear money boundaries. This means that there is a clear understanding of where your money stops and your children’s money begins, and vice versa. This teaches your children self-control and cautiousness when spending money, so they don’t become reckless and expect you to cover for them when needed. When it comes to financial responsibility, money boundaries also:

  • Set clear expectations for both you and your kids
  • Help teach children how to deal with their own money problems
  • Eliminate impulsive buying
  • Teach children how to control and manage the money they have

For the money boundary to work, it is essential for you as a parent to set some rules regarding money loans, spending rules, negotiations for pay or replacement of cost rules.

The Value of Giving

It won’t take long for your kids to start liking the idea of having money and spending it on toys and games. At that point, it is essential to begin teaching your kids about the value of not just earning and having, but also the value of giving. So, make sure to not only take your kids to the mall and supermarkets but also to charity events or a church where they can find someone who would immensely appreciate your kids’ help. Doing so will show that theres much more beyond buying toys and games, which is humanity and recognizing the need to help other people out, who may not be so lucky with money.

Photo Credit: tony hall

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