Teaching children about money starting at a young age is essential to them becoming financially responsible adults. Even young kids can learn about money. If you are teaching a three year old to pick up toys, teach them a little about money too. For example, if they pick up ten toys off the floor in their room, give them a small amount of money (perhaps a penny or nickel per toy). Get a jar or piggy bank and let them put the money in it (putting it in something see through is a good way help them learn visually). Educational toys that teach counting money are also beneficial.
Once a child reaches the 9-12 year old range, it is a great time to open a savings account (if you haven’t done so already). Help them fill out deposit slips and take them with you to do their bank transactions. Be sure you show them their bank statements. As they become teens, you can increase their responsibility.
Allowance or no allowance? This depends on the parent, but the majority of parents will pay their child for chores in one way or another. Even if a child is paid for chores above and beyond what is expected of them, make sure to set guidelines for the child to save a minimum of 10% of what they earn.
The three most important money rules to teach a child of any age (Of course,the sophistication of the lesson will be age appropriate.) include:
The percentages above are suggested amounts and can be adjusted as needed.
Teaching children about money is an important life lesson no parent should ignore. The payoff will be having a financially responsible adult child.
*Information contributed by Genworth Financial. All opinions are 100% my own.