What kids need to know about Money

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There is more to teaching kids about money then the philosophy that money doesn’t grow on trees. While I fully stand behind Dr. Phil’s rule that kids should not be involved in matters they can not control (money troubles, adults arguing, etc.) , I do believe that it is never too early to teach them how money matter work. They may not have to necessarily know the financial situation in details, but it does not hurt to explain the value of a dollar earned. Here are a few great teachable moments that will start your kids off in the right direction.

1. It’s never too early to start learning about money.  Even a preschooler can be told there is such a thing as a job and that people need to go to their jobs, because they earn money to pay for food, clothes and possibly toys for a lucky preschooler.

2. Start a savings habit early. A good old-fashioned piggy bank is a fun teaching tool.  Give children a goal – a special toy or treat to save up for, and help him or her track the savings.

3.  Teach them how to curb spending.  Take your kids grocery shopping and show them how you compare prices and use coupons.  Bring a calculator so they can keep a running total and see if their numbers are accurate when you reach the cashier. It is easy for a kid to know about saving money, but all that logic goes out the door when they want to buy something because kids don’t have the ability to link the two concepts quite yet. They need to see the differences being made.

4.  Tie allowances to chores, so your kids earn their money and get an understanding of the rewards of work.

5. Turn a PSCU trip into a learning experience.  Teach the kids that money doesn’t just magically spit out of ATM’s for free, it comes from your paycheck and goes into the credit union before it comes out of the machine.  Inside the credit union, explain what they do during the transaction.

6.  By the time a kid is in high school, he or she should have, and know how to use, a savings account and be taught how to use checking accounts and ATM’s.

7.  Ben Franklin said there is nothing certain in life except death and taxes.  When they’re teens, show your kids how to fill out a simple tax return such as the IRS EZ form.

8.  Knowledge isn’t cheap, if you want college credit for it.  Kids need to prepare for the cost of college; go on www.collegeboard.com or other sites with your kids to research and plan for the costs of the colleges they may want to attend.

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