Singapore Profit

Credit cards and expenses

Many children watch their parents live on credit cards. When they need a new item or have a bill, their parents reach for their plastic card and magically they complete the transaction. Relying on credit cards does little to truly teach children about managing money or being financially responsible adults. Here are some tips on finding ways to teach children about money.

Teaching the value of money

Schools teach reading, writing and math, but rarely do they cover everyday tasks such as paying bills, understanding budgets, or working with interest. It’s up to parents to do the educating of children in this area. Here are some steps for you if you’re trying to teach your child about money:

1. Start teaching children early about money. The days where children can be completely kept in the dark about finances are gone. In today’s tough times, children need to know that money has to be managed. Some of the ways to do this are to teach children about saving their hard-earned cash. Let them see their dollars accumulating in a box or drawer. When it’s full enough let them take it to their bank account and deposit it. Visual aids help to get a message across, and they don’t make all those picture books for nothing. If they see their money growing, they can get an idea of how it will work in the future.
2. Teaching children where money derives from and correlation between work and wages. Normally children believe that money “comes from mommy and daddy.” When mom and dad get strapped for cash, credit cards are typically what they rely on. Every child should be taught the basic concept of how working brings in money. And then how money buys things. And then how we use things and repeat the cycle. Paying children for out-of-the-ordinary tasks, like helping clean out a garage or attic, can also help them see the value of hard work.
3. Consider offering your children allowances. Experts debate the effectiveness of allowances and whether or not children should be paid to do everyday chores. Children could be paid for large tasks that help out around the house, but don’t pay them for what they are supposed to be doing anyway. Responsibilities or daily/weekly chores could include keeping their rooms clean, sweeping, mopping, cleaning up toys and assisting with laundry. Conversely, a family having a garage sale can pay their child for keeping things lined up and organized neatly for sale.
4. Make the savings plan interesting. Depending on your child’s age, help them to engage in saving money. A younger child might be involved in something like decorating a piggy bank. For an older child it may mean helping them save for a bicycle or larger item.

The importance of finances

With the recession hitting hard, it’s more important than ever to understand how finances work. Children need instruction from parents on the acquisition, saving, budgeting of money, and how credit cards and loans work, and how to manage it all. For their futures to be secure, they need everyday learning presented at an understandable level. Educating children today makes for better prepared and responsible adults tomorrow.

Popularity: 3% [?]

Share This