Money doesn’t grow on trees. It’s a cliche, but certainly appropriate when dealing with a child’s demand for money. Children don’t understand many aspects to life. Why would they understand the value of a dollar unless they learn about it. There are things you can do to teach your child about the importance of money.
The best way to build a healthy respect for the value of the almighty dollar is to get your child used to dealing with money — the earlier the better. Because kids learn by observing and repeating behavior they see, they will take something away from your the educational opportunities you create as they grow. The other really handy thing about teaching a child about money early is it’s useful for learning better counting skills. If possible, start with a small allowance so they can experience money on their own terms.
Open a Bank Account
Saving money isn’t important when your 10 years old. But understanding the principle behind saving money is a life skill that can carry your child a long way. Opening a bank account is a good way to start a discussion on saving money. Explain what happens at a bank. Make it clear their money isn’t gone, but just being held for them; they can get it back anytime.
Pay for Performance
The pay-for-performance idea is something used in business, particularly professional sports. If you give your children chores to do, you may not give them an allowance for those chores and that’s fine. Everyone needs to learn to pitch in and help out. That, too, is another very important life skill. Add opportunities to make money, though, by giving them additional chores.
Practice setting goals with your child. If there is something that they desire, explain to them that they have to earn the money. In the same vein, make it realistically achievable for them to do so. By setting goals, they will not only get a better understanding of value but it will also reinforce the value of saving.