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5 Money Management Tips for Children

September 8, 2020

It’s never too early to learn about the importance of money! Kids tend to have lots of questions for their parents, and many of them are related to family finances. As kids go back to school, MonsterMortgage.ca would like to share these “money tips” that you can use as a tool to help your children understand money management skills in an easy and fun way! We are excited to share our knowledge with you and we hope to inspire you to talk to your children about money and to encourage them to save, spend (sensibly) and to share!

 

A piggy bank can be a great way to teach your kids the importance of saving while giving them an easy way to do it. When a child is very young, it is exciting for them to shake their piggy bank and hear the coins rattling around inside. If you have a clear container, a child can see the level of coins rise as they add more and more to the jar. There is a sense of pride associated with saving and until they realize the potential for spending, many children are quite satisfied with the act itself.

 

Children learn by example, so the best way to teach your child about saving is to save yourself. For example: when you are out shopping together, show your child how to know the difference between various prices and explain why buying one makes better sense than another.

 

One of the most important things you can do is start a conversation about money and the importance of saving. Discussing money doesn’t need to be scary or taboo. Use financial discussions as teachable moments that can emphasizes family values like hard work and responsible spending.

 

Have you ever heard this one: “but Mommy, why can’t you just go to the bank machine to get more money?” Young children watch our every move. They see the bank machine spit out money, but do they know how it gets there?

 

This is a great opportunity to teach your child about earning. You can explain that when you work you earn money in exchange for your labour, time, and skills. The money you earn goes into your bank account where it is kept safe until you need it to purchase things like groceries or to pay bills for the house.

 

Children love to help out and be involved! Give them tasks to do such as washing dishes, dusting, taking the garbage out, and pay them. This will provide them with the incentive to learn how to work.

 

One way to help children learn the value of money is to equate an amount of work with the price of an item. We can help our children to understand the cost of items and the value of a dollar by getting them to do piece work jobs or those that pay by the hour.

 

If it takes them an hour to earn $5 for washing the car, they may think twice about buying that new toy.

 

When your child really wants the latest and greatest toy or gadget, let them know they will have to save for it. Give them a jar for each of their desired purchases and offer them a small allowance each week in a denomination that encourages savings.

 

Our children ask us to buy them things all the time, like a new hockey stick, an iPad, or a chocolate bar. However, it is important for them to understand their cost. The value of these items will sink in if they are encouraged to purchase them with money that they have earned and saved.

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