A child learns about money in several ways, including what they see or hear around the house from experience and adult guidance. Parents can use various teachable moments such shopping at a store or online, making a major purchase, receiving money as a gift, visiting a financial institution and planning a family vacation. Here are some different ways children receive money from their parents:
Allowances: One of the best ways to teach children is through proper allowance management. Paying children for work they do and having them spend their own money when they want to make purchases. Each purchase and allowance payday can be a great time to teach kids about money.
Dole system: Parents have control over spending but kids sometimes think the money supply is endless.
Earnings: Teaches that money comes from work and teaches responsibility and financial independence. However, it doesn’t mean kids can manage the money they earn.
Talk to your children about money. As parents, if you borrow money, you have to pay it back. The same thing should apply to children. You should help them decide if the money they are borrowing is for a want or a need. It doesn’t hurt for them to learn that they can save for the purchase and it may make the purchase more rewarding. Be sure to express your desire for things you can’t afford. This shows children that parents sometimes have to say “no” to themselves.