Recent studies show that teaching your kids about money at a very young age can help prepare them for a life of making smart financial decisions. Experts recommend that parents start teaching their kids about money as young as age five. If you want to teach good money habits to your children in a rather simple way, here are a few ideas you can use.
First, allow your children to observe the bill payment process. You can have your children sit with you as you go through a few monthly statements and pay the different amounts owed to various creditors such as utility and credit card companies. You can also teach a child about the value of a dollar by pointing out the price of different items in a grocery store receipt. In both of these cases it will help your child understand the cost of items and how far your paycheck or his allowance will go.
Secondly, you can encourage your children to save money by opening up a savings account for them and then matching either each dollar they save or some other portion they put into the account. This matching could be done for a specific purchase such as an automobile or period of time such as summer break from school. This process rewards kids for establishing money goals and saving money for future purchases.
Parents can also use the dinner table conversation as a time for discussing money matters. Ask your children what they are saving money for now or if they have any questions about money. They may ask you about credit cards or perhaps opening a bank account. Whatever the question or topic, this is another opportunity to encourage your kids to be thinking about money and allow you to help them develop good money habits.