How Can I Teach My Kids About Money?
How Can I Teach My Kids About Money?
Teaching Children Financial Responsibility
In this newsletter, we provide you with notes on Teaching Children Financial Responsibility, an episode of The Wonder of Parenting - A Brain Science Approach to Parenting.
Michael Gurian and Tim Wright have over 30 years of experience using brain science research, best practices, and their own experiences as dads to help parents read, understand, and implement the gift of your child’s brain, the built-in how-to manual that will help you enjoy the wonder of parenting.
Save time and read our notes how to help children learn to be financially responsible.
Topics Covered in this Summary
Financial Responsibility through Allowance and Chores
How to Teach Children Financial Responsibility
Financial Responsibility through Allowance and Chores
Letting kids manage an allowance teaches them to think about choices, alternatives, and the results of their actions. As a parent, you can give your child an allowance when you think they're ready, usually around age 5 or 6.
The most common type of allowance is for children to earn money by performing chores. Under this system, kids get money for doing chores around the house. Most of the time, they get a set amount of money for completing a list of chores each week.
The advantage is that kids can see a direct connection between how hard they work and how much money they receive. Furthermore, if your child does not complete the work, they will not receive spending money.
How to Teach Children Financial Responsibility
Teaching children about money early on helps them manage their money responsibly as adults. It is also known that children with a healthy money mindset have parents who teach them about money and encourage them to spend and save wisely.
You may teach your kids about money in several ways. Some parents give allowances, while others do not. However, there’s no wrong way to do it, and every family has a different way of doing things, so it all comes down to what works for you.
Alternative methods of teaching children about money:
Discussing finances with your children in an age appropriate manner.
Getting your child involved in a Charity.
Allowing them to buy what they want with their allowance because they have earned it.
Teaching children in line with our family values. For example, if you value ‘helping others’, teach kids to save 10% of their allowance for a cause they care about, such as charity or church.
In addition to helping our kids learn, a savings account is a good tool for teaching children financial basics and responsibility. Like learning to clean your teeth, saving is a valuable life skill. It will allow your kids to start with the right approach to money.
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