Teaching Children about Money

1.   Allowance

Give them an age appropriate amount that is theirs to spend on the extras as they choose.  This gives them the understanding of the power of money.

2.   Loans

Make them a small loan and charge them interest so they understand the concept of borrowing.  This teaches them responsibility and about the cost of borrowing.

3.  Secondary Education

Tell them early (by age 12) you expect them to contribute to their secondary school deduction and help them decide on targets and methods to earn that money.  This teaches them to value their education.

4.  Household Expenses

Allow them to have age appropriate opinions about household expenditures.  This will prepare them for the real world when they will have to make these decisions for themselves.

5. Payment for special tasks

Children should be expected to perform normal chores as part of a being family.  In addition, allow them the chance to earn money by doing larger time consuming tasks.  This will encourage them to learn the work ethic.

6. Charitable giving

Allow your children to choose a charity to save and give to.  This will teach them to appreciate the financial privileges they currently enjoy.