[January 20, 2015] |
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Take Charge America Offers Tips for Teaching Kids about Money
Most parents know it's important to teach their kids about money, but
it's easier said than done for today's children, many of whom sport
pricey smartphones, head phones and other gadgets with no real
understanding of the costs involved.
"Many children have no inkling of the value of a dollar," said Mike
Sullivan, director of education for Take Charge America, a
national nonprofit credit counseling and debt management agency.
"Technology has made it easy for kids to make purchases on their phones
or tablets linked to mom's credit card, but they don't really know where
the money comes from. It's up to parents to teach kids about money
before they enter the real world and the stakes are higher."
Sullivan offers seven tips for teaching children about money:
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Teach by example. Parents who are careless with money are more
likely to raise children who share their attitudes about finances.
However, kids whose parents are responsible with their spending will
grow up understanding the value of a dollar.
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Demonstrate the work-money connection. Many parents lavish
their children with toys and expensive gifts with no strings attached,
but kids who earn money through chores, save up for expenive
purchases and learn the concept of delayed gratification will be
properly prepared when they enter the real world.
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Don't use money as a reward. Children should not feel entitled
to money as a result of good behavior. Grown-ups don't earn $2 for
eating all of their carrots or brushing their teeth. Parents should
set basic expectations for children's behavior - without any promise
of payment - and provide money in exchange for chores and other work.
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Develop early budgeting skills. As your kids acquire money from
chores, birthdays and other gifts, help them budget upfront. Create
three jars labeled Spend, Save and Give. Each time they receive money,
they must choose how to allocate that money themselves. Help them
stick to the plan when it comes to spending and saving to drill in the
money management lesson.
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Open a savings account. Parents can teach their children the
basics of banking by helping them open savings accounts in their own
names. Kids will learn important financial lessons by watching their
accounts grow or shrink depending on how they manage their money.
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Encourage older teens to get a job. Teens are less likely to be
cavalier with money when they understand what it takes to earn it. A
job outside the home can teach teens responsibility, discipline and
time management.
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Try an object lesson. Parents can use a time-tested technique
to teach their kids the concept of discipline, saving and interest.
Give children one chocolate, candy or other treat and tell them they
can eat it now, or wait a few hours to earn two treats. Studies show
that kids who learn how to delay gratification experience greater
happiness and success in life.
For more financial tips and download money-management lesson plans for
elementary-aged students, visit the Take
Charge America Education Library.
About Take Charge America, Inc.
Founded in 1987, Take Charge America, Inc. is a nonprofit agency
offering financial education and counseling services including credit
counseling, debt management, student loan counseling, housing counseling
and bankruptcy counseling. It has helped more than 1.6 million consumers
nationwide manage their personal finances and debts. To learn more,
visit www.takechargeamerica.org
or call (888) 822-9193.
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