MONEY TALKS: How To Raise A Prudent Child

It is important to teach children about money because lessons learned will produce a prudent child. These teachings will have a positive impact on your child’s financial future enabling them to make wise financial decisions without difficulties. Here are some tips that can shape your child’s attitude towards money.

1. Introduce your child to money when they are able to count and make simple additions and subtractions. Teach them simple additions and subtractions using money. This will familiarize them with your currency.

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2. Teach them the concept of saving money, and how money can be made to grow by getting her a piggy bank for starters.

3. Make your child understand the differences between needs, wants and wishes using everyday life examples, so that as they get older they will be able to make sensible decisions when spending money.

4. Alert your children to the dangers of borrowing and paying interests on money borrowed by charging interest on small loans you make to them.

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5. Establish a regular schedule for family discussion about finances, how to economize at home and the many alternatives that exist to spending money.

6. Use regular shopping trips as opportunities to teach your child the value of money because this is where children first learn to spend money and if they can understand the importance of planned expenditure, they will not want to waste their finances.

7. When giving your child an allowance, let it be in small denominations to allow for prudence in spending.

8. Teach your child the value of setting financial goals for themselves and how these goals can be attained. If for example, your child wants a roller skater, take her to the store to find out what it costs. Make the value of the roller skater her financial goal. Show her how to attain this goal by encouraging her to save her allowances. Add some money to what has been saved as interest paid.

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9. Show your child how to keep good records of money they have saved, invested or spent and encourage them to keep receipts of valuable purchases in a drawer. This will teach them accountability.

10. Take them to a bank to open their own savings account. This will increase their enthusiasm about saving as they watches the money grow and yield interest in due time.