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Tips From a 'Millionaire Mom' on Teaching Your Kids About Money by admin

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Mom and kids at computer

Expose your children to day-to-day household decisions about buying and bill paying online. They will develop their own good money habits from what they see you do.

 

In school, kids learn the fundamentals of reading, ’riting and ’rithmetic, but where do they discover the basic facts about how to handle money?

When it coming to developing sound money-management skills in children, it’s largely up to parents. While teaching kids about money can sometimes feel like an overwhelming challenge, it doesn’t have to be.

The lessons don’t require formal discussions around the table. Everyday activities such as trips to the grocery store or even playing classic board games can be used as teaching tools.

Another common tool — an allowance — can also be helpful in teaching children the value of money. Here are four tips on maximizing the learning opportunity:

• Divvy up the allowance. If your child receives $5 per week, hand over five $1 bills. This makes it easier for a child to think about how to allocate different amounts for specific purposes, such as putting $1 toward saving, spending and giving.

• Set savings goals. Discuss the idea of saving for a new toy or game. This is also a good time to talk about opportunities to donate a portion of his or her money to a cause that he or she cares about.

• Invest for the future. For many kids, college seems like a far-off event. Yet it’s a goal most parents want their children to achieve. Help them feel like they are contributing to their own future by discussing the reasons behind long-term saving.

• Give them room to grow. When it comes to the spending portion of the allowance, remember — it’s theirs to spend, even if it’s on the ugliest pair of shoes in the mall or a badly made toy. Better for them to learn now about good and bad investments when the risks are still small.

Whatever the teaching tool you choose, the most important practice is sharing these lessons with your children early and consistently.


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