Teaching a Child about Money

A child will eventually have to learn how to use money and be responsible with it.  Therefore, the best time to start is while they are young.  Parents obviously need to be the ones to spearhead this operation, and the child can then learn a lot from budgeting and being responsible with money.  There are several ways a parent can teach their child how to be responsible with money and how to budget.

1.  Parents can give their child an allowance for chores done around the house.  The allowance doesn’t need to be minimum wage, but can be several dollars a week based on what they do.  When a child has an allowance, the parent can begin to teach them what to do with their own money.  A child will understand it better when they are using their own substance, and, if they mess up, they are only messing up with a few dollars.  The parents need to be careful not to pay their children too much, and they need to make sure they are teaching them how to budget while paying them.

2.  A parent can explain budgeting and financial responsibility by explaining to their child what a budget is and how it works.  Parents can either use the one they have, if any, or they can go online and find a sample budget.  The theory is simple, as a budget revolves around the expenses and the income, and making sure that there is not a negative variation.  Parents can teach their child to set up their own budget based on the few dollars they earn a week, and this can lead to a child being financially responsible.

3.  The children can be taught financial responsibility by their parents by learning how to use a checkbook.  Simple mathematics is involved in using a checkbook, and almost every family uses one, so the parent has an easy tool to use to teach their child about money.  Making sure every penny is in the right place and keeping track of all bills and expenses are valuable lessons that a parent can teach their child from a checkbook, and checkbooks are simple enough that even a child can understand.

Children need to learn how to handle budgeting and money so they don’t cause their country to incur more debt.