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October 29th, 2012 at 5:00 am

Teaching Kids the Value of Money

I often thinking about how to effectively teach my boys about money. In today’s world, they often see us swiping a “magic card” that pays for gas, food, treats, and experiences. They don’t realize that there is only so much money that come out of that “magic card” to pay for the things we need and want. They don’t see the mechanics of earning it, deciding how to spend it, save it, or even what amount to donate in different capacities.

Learning how to manage our money is something that is developed mostly through trial and error during experience, but as a parent it is our duty to help those trials and errors be backed by good judgement.

One of the best ways to start the trial and error is by letting them deal with money as children. What is better than an allowance that they can determine what to buy. This experience lets them see how they can save their money (to get something bigger) or spend it. Sometimes they will spend it fast and learn that they don’t have money left to spend on other things.  You can also lend them money as parents, which simulated debt in the real world on a kid level.

I also like to use our allowance to help the kids learn to give. I remind them of things they may want to give some of their money to and always let them put it in jars if they ask. I talk about the things that their father and I donate to, but also explain that there are other ways to donate by volunteering and supporting events.

I am always amazed how their eyes twinkle when they are given that allowance, but become so critical about how to spend it. I hope they truly are learning about the value of a dollar.

Kim Ross also writes at  A Little Bit of This and That ~ The Adventures of a Stay at Home Mom.

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