Teaching Children to Use Money

An important lifetime benefit

Regardless of your child's age, you are the primary teacher about money matters. Your attitude will influence the attitudes of your children.

Today everyone spends more money to live, and families depend on money more than ever before. Because family finances are becoming more and more complicated, even young children should learn something about money management.

Whatever significance money has to you... as a parent whether it's anxiety or pleasure your children will pick up on it. Conveying healthy attitudes about money requires an example of using money without heavy emotional attachments. Unfortunately, money is used in families as a symbol of love, power or approval

Children learn by example.

Teaching money management to children can be fun. The experience can benefit the relationship between parent and child, too. If you gear your money management lessons to the child's needs, interests, abilities and level of understanding, you'll be successful in teaching money concepts. Children can learn new concepts about money and spending if they're taught by the use of examples, reintroduced on different occasions and in different situations, and if they're allowed to practice the concepts.

Here are some important concepts of money and its use

• Money or its substitutes such as credit cards are only a medium of exchange. We exchange money for goods and services.
• We must learn to spend before we can learn to save. Let your child pay for items in the store.
• Savings is just deferred spending. We usually save for a specific purpose or item. Let your child learn to save for something he really wants, something that doesn't require too long a savings time.
• Money resources are nearly always limited. Teach your child how to choose with his limited funds from among all the many things he or she wants.

Most family economists and child development experts believe that allowances geared to the ages and needs of children can help them learn to make decisions and how to manage money at an early age.

For more information and suggestions about managing your family's money, contact your local county Extension office.