Financial Literacy For Kids: Not Just About The Money
By Fern Weis. Posted on .
Now, more than ever, our kids need to know the value of a dollar (or peso, Euro, or yen). In this time of what many would call the 'age of entitlement', knowing how to earn, save, and yes, how to spend, their money is crucial.
It can be an allowance or a job, but there should be something. If you give an allowance, when and how much is up to you. (Caution: Parents, be sure that your kids have some unpaid responsibilities at home. They should know that some things are just part of being a responsible, contributing member of the family. The allowance would be for tasks above and beyond what is normally expected.)
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Talk to your kids early about money management skills.
1) An allowance forces kids to learn about making choices. "To buy, or not to buy? And which one? Is it worth it to me to buy the fancy label?"
2) Once they have money, they can start to budget. "How much do I need to buy something and how long will it take to earn it?"
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3) Having money and a wish list means they have to learn to save. This also fosters self-control. Saving means avoiding impulse purchases.
For more on this topic, listen to "Why Should I Give My Daughter An Allowance" from the group at Smart Girls Make Savvy Women.
