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Teach Financial Responsibility Early

by Rosanne Lorraine | July 15th, 2008 | Elementary

Letting your child learn the value of money while he or she is young can help him or her become a financially responsible adult in the future. The first thing you need to do is involve your child in simple money transactions. Explain the basics of financial transactions by using pennies to demonstrate the amount of money that goes to utility bills, food, and other monthly expenses.

Take them shopping

It is also important to involve your child in your shopping activities. That way, they can see the actual process of how money exchanges hands. The supermarket is a good venue to do this; you can point out the difference between the costs of different brands and point out why you prefer one brand over the other. You also can explain how credit cards and debit card work to older children.

Answer their “Are we rich?” questions

It is inevitable for children to be curious about their financial standing. Because of this, expect that they will ask you about how rich you are. Try to let them know that people need to find jobs and sometimes even struggle to have enough money to cover their food and clothing expenses while there are also people who don’t need to worry.

You may feel that financial matters are private matters that should not be discussed outside the home. If this is the case, let your child know that family financial matters should not be disclosed to friends and strangers.

Empowering your child through pocket money

Giving your children pocket money will give them a sense of independence and freedom of choice. This is because they can make decisions on what products they want to purchase and how much they are willing to spend for these products.

Set aside a reasonable amount for their age and needs. It may get more complicated as your children grow older, especially when they compare their allowance to their friends. So you must decide on what you think is a fair amount by comparing notes with other parents as well.

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