Raising Financially Aware Kids

With all the modern comforts kids now have, it's often difficult to teach them the value of money.  Here are a few tips to help you raise financial awareness in your kids. 

Step 1: Start a rewards system

Your rewards system can be as simple or as complicated as you want it to be. For example, create chore charts for each child. Instead of rewarding your kids with money for chores, use markers or stickers. Require your child to have “x” number of stickers or markers at the end of two weeks in order to get that new CD.

However you choose to implement your rewards system is totally up to you. The main idea is to get started on something now. Using a rewards system will teach your kids that everything comes with a price—either they’re willing to work for it, or they’re not, but the choice is left in their hands.

Step 2: Create a savings plan

If you already have an allowance plan in place with your child, it‚Äôs time to teach them how to save. Have your kids put 10% of their money into a savings account.  Ideally, you want them to save more than they spend. As an incentive, you might even offer to match his or her savings dollar for dollar at the end of each month or year. As their savings begins to grow from this little incentive, they will quickly see the importance of saving.

Step 3: Talk Money

Children, especially young children, don't really understand the whole money process.  From a young age talk to your kids about money.  You don't want to make money a major issue, but you can talk to the kids about how you have to pay the electric company in order to have electricity or how you go out to work to earn a salary which pays for food and living.  You can go a step further by having your child help you at the grocery store.  Ask them to help you choose between two similarly priced prodcuts or teach them how to look out for special offers.  By talking to your kids about money from an early age and teaching them that money really "doesn't grow on trees" you stand a much better chance of them learning the value of money early on in life.