4 Tips for Managing Kids and Money

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Kids and money, it is a hard equation for many parents. They question how old a child should be before they get their first credit card or how to keep the family cell phone bills under control. Kids and money will always be a delicate point for any family, but especially today. Here are some ideas to help you define the best approach when it comes to your own kids and money priorities for them.

Preschoolers and Money

At this age most kids think of money in concrete terms, which is why coins are such a good teaching tool. Physical piggy banks are another great teaching device. Showing them how much something costs by letting them put the money in a vending machine is another good tool. If they get to “shop” in a dollar store from time to time, they will learn about the value of money and how someone changes money into things when we shop.

Elementary Kids and Money

This is a good time to begin to teach kids about saving money. At this age they begin to understand money’s value and the relationship of numbers more clearly. Take them to the bank and open up a real bank account for them. This is a good time to begin an allowance, part of which should be put away in their bank account each month.

Tweens, Teens and Money

Once they start high school they should be well aware of how to handle, save and spend money appropriately. By now they should be buying clothes and personal items from their allowances, as well as continuing to save for bigger items. As they come into their teen years, it is a good time to encourage them to look at a summer job or part-time after school job. This is also a good time to consider having them open their first checking account, as they may be looking at bigger ticket items such as their first car.

Kids, Money and Chores

Of course, one of the big questions is always whether to tie allowances to the chores you assign your kids. When the chores are tied to their allowance they are much more likely to complete them. One solution is to assign them certain chores such as making their bed or picking up their room that are not attached to their allowance. Then you can add others, perhaps taking out the garbage or cleaning up the garden that earns points or dollars. This makes them responsible for the money they earn and teaches them the value of the dollar. The bottom line is to give each child some accountability that comes with the allowance and in the end teaches them how to handle money responsibly.

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