Children are not born understanding how to manage money and very few parents take the time when their kids are growing up to teach them.

Financial management may or may not be taught at school, so teaching financial responsibility at home is critical. Children run a greater risk of growing up to make bad financial decisions, if they do not learn basic money values at home.

Elementary school is a great time to teach children the importance and value of earning and saving money. Begin using money as a means of teaching when toddlers first learn how to count, allow children to run their own lemonade stand and yard sales during the summer, enforce good saving and spending habits with allowance, and begin explaining price differences during grocery store trips.

Many middle school students have little understanding of finance and economics however they are beginning to enter the stage of their lives where they can start taking on more responsibility. Have pre-teens and teenagers start working jobs or doing extra work around the house and neighborhood to earn money. These are all excellent ways to instill the value of hard work and the importance of saving money.

According to Jumpstart Coalition for Personal Financial Literacy, the average student who graduates from high school lacks basic skills in personal money management. Many cannot balance a checkbook and have little understanding of basic concepts involving earning, spending, saving, and investing. It’s never too late to start teaching your child about money management.

Consider using some or all these management strategies with your child:

♦ Integrate money into daily life. Take your child grocery shopping and compare the prices of two similar items. Discuss why the prices might be different. You could also let your child participate or watch when you pay bills and explain the process.

♦ Use comparisons a child can understand to help them grasp the value of money. Instead of stating, “Milk costs $4,” you might say, “I have $4 to spend. I could buy a gallon of milk, two packages of chocolate chips, or two bags of apples. What would you choose?”

♦ Give your child an allowance but consider the frequency and amount. This will depend on your child’s age and developmental stage. When your child has actual money, she learns how to handle it better.

♦ Model good financial behavior. Get your own financial house in order and be honest with your children. Let them know why you are doing what you are doing, and then embark on sound financial management principles as a family.

♦ Teach your children about choices in managing their money. Spending is not the only option for your child when managing his or her money. Saving, investing, or donating to charity are viable options.

♦ Back off and let your child learn. If your child wants to spend his entire allowance on an expensive toy that he thinks he must have, let him. In this way, he will learn that the money is used up and unavailable for other things he may have wanted, thus showing the value in savings and delayed gratification.

♦ Make it fun. Express thankfulness and gratitude for the money you have, and the ability to manage it wisely. Help your child to develop a way to earn extra money with something like a lemonade stand.

♦ Say no and mean it. Your child may ask for a loan or an increase in allowance and you may be tempted to give in. Your child will never learn how to live within their means if you keep giving in.

Remember that helping kids learn to manage money is not a fixed event but something done over time. Teaching your children good money management skills now will ensure they become financially secure adults in the future.

Mary Migliaro is an educator, parenting mentor and consultant who lives in Cherokee County.

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