This article is one of a total package of articles for teaching your kids how to manage their money. Change the Way They View Money: If your children's world view is internally centered and focused on their immediate gratification, your children will grow up tending to associate their worth to what they do or don't have. It does not have to be a donation of money; in fact it is best if it is the use of their time and abilities. Money is a tool to be used. Money is a way, devised over time, to help us keep track of transactions. Sometimes the transaction is our time and effort exchanged for purchasing power. One of your responsibilities as a parent is to help your children learn the benefits and detriments associated with money. If you can help them to learn that money comes from invested effort and wise decisions they will begin to appreciate money for what it is, a tool that is itself "bought" with their energy, time, and talents.
If your kids think that money comes from you and there is an endless supply, they will happily spend you into oblivion if you let them. Establish a Spending Plan: Sit down with them and work through a spending plan for their income. As your child matures in this area, re-evaluate their plan and help them make adjustments.
If you can't say no, they will learn what you teach them and they will be unable to resist that impulse purchase that can wreak havoc on their spending plan.
Savings Will Save Them from Disaster: Saving serves two purposes for most kids. Without both parts, the spending plan is pretty much doomed to failure and frustration.
It's OK to Talk About Money: Include your children in some of the family's money decisions. Teach Them About Compounded Interest: The "magic" of compounded interest can help them achieve their goals much sooner or on the other hand can bury their goals in financial bondage.
