Some parents don’t teach children about money because they think they shouldn’t talk about money with children, don’t have the time, or think they don’t have enough money. Parents should take the time to teach children about money regardless of income and should start when children are young. This publication presents some helpful guidelines and suggestions parents may follow. It provides general background and outlines by age group and stage of development children’s understanding and use of money as well as conflicts about money. It also identifies activities you can use to teach your child about money. Most people have strong feelings and opinions about money, based on childhood experiences and the values and beliefs of their families. Most often, these experiences, values, and beliefs are different for each parent. It is vital for the healthy development of children that parents talk about these feelings and opinions and establish a consistent approach to teaching children about money.

Teaching your children about money is more than preparing them for employment or teaching them to save some of the money they earn. It includes helping them understand the positive and negative meanings of money. For example, children need to learn that while it is nice to show someone love by buying a gift, it is just as important to show love through actions and words. Children and parents should talk about their feelings, values, attitudes, and beliefs about money. This helps children understand that conflict about money occurs and needs to be discussed in the family and that compromise is often necessary.

It doesn’t take much to show them and to give them the direction they need to succeed. With these tips you are sure to aid your teens in becoming successful adults.

* Guide and advise rather then direct and dictate.
* Encourage and praise rather than criticize or rebuke.
* Allow children to learn by mistakes and by successes.
* Be consistent while taking children’s differences into account.
* Include all family members in money management discussions, decision making, and activities as appropriate for their age.
* Explain to children what they can and cannot do and the consequences of violating the limits.
* As children get older increasingly include them in discussions of limits and consequences.
* Expect all family members to perform unpaid, routine household chores based on their abilities.
* Express your desire to have things you can’t afford. Children need to know that parents say “no” to themselves, too.

Recent research shows that today’s youth have large sums of money floating through their hands as extra income to be spent on snacks, clothing, and cars. A 1997 study sponsored by the U.S. Department of Labor found that 40% of children receive regular allowances or handouts from their parents or guardians averaging $50 per week. Your children will develop their financial attitudes and behaviors by what they see you do, not what they hear you say. Actively encourage good values. Teach your children the value of work and teach them responsibility. Teach them delayed gratification by letting them save towards a goal of a new bike or video game; let them know that even you have things you want and cannot have.

Even if you are able to buy your child everything he or she asks for, refrain from being overindulgent. By fulfilling every whim, you may deny your child of several things: appreciating things that cannot be bought; being motivated to work hard; persevering through obstacles and frustration; and achieving a hard-won goal. Give your children the chance to earn extra cash by doing jobs beyond their expected chores. Award jobs to the lowest bidder as part of a “Saturday Job Auction.” Involve children in preparing a grocery list, and then take them to the store with you. Teach them how to compare prices by making a game out of finding the best deals. Have the children hold the coupons, and let them hand the money to the cashier. Sticking to your original list will also demonstrate one way to limit impulse shopping.

Help teenagers who are earning money create and follow a budget. This is especially important before they leave for college, where they will have significant financial responsibility. Emphasize the freedom that comes when they plan their spending and saving. Taxes are a significant expense that few children consider. Have your child sign his or her tax return. If your child is employed, look at his or her pay-stub together and discuss how taxes work and why they are necessary.

Teaching your children about money can be easy, and even a fun experience, but most importantly, a very valuable lesson. Here are a number of ways to teach children about money, so they don’t end up having problems in the future. Money is a fun thing to have, as we are all aware, and teaching children at a young age about money will go a long ways to ensuring that their financial future is the best it can be.