Five Ways To Teach Your Kids The Value Of A Dollar

One of the most important lessons a parent can teach to their child is the value of a dollar. A reality of life, teaching children at a young age about money and how to handle money will help them to be more financially responsible when they are older.
 
1. Give Them An Earned Allowance
One of the best lessons in money a child can learn is that in order to make money, it has to be earned. Because children generally have little concept of how money works, having them do household work or complete a set of chores in order to earn money will help them begin to understand the process.

2. Loans & Credit
With older children, it is important to sit down with them and talk about loans. Often, kids see their parents use a piece of plastic to pay for purchases, and they have no concrete understanding of how that works. In the future, with their first credit card, if they believe they can “buy now, pay later” on their own time frame, they will have a big reality check when the first bill comes due. Instead, sit down and explain to them that credit cards should be used wisely, and that in order to stay on top of payments, only purchase what you can pay off.

In terms of loans, teach your kids about the various loans that are available, such as mortgage loans, car loans, title loans from companies like TitleMax, business loans, etc., and what they are used for.

3. Help Them Be Entrepreneurs
While an allowance does offer children a weekly income, when they are excited over an item they want to purchase, help them to come up with creative ways to earn money.

Start a craft or baking business with them. Thanks to Pinterest and Etsy there are endless websites to making household items or delicious recipes that can be sold in home as a business. If they are too little to promote themselves, tell friends, family, and neighbors, and even try getting them sold at a craft fair or farmer’s market.

Or, have extra chores around the house ready for allowance “bonuses.” For every extra chore they get an extra amount added to their weekly allowance.

4. Don’t Buy Them Everything
Parents have a responsibility to purchase necessities for their children. But, when it comes to the extras, parents should have their children purchase their own wants. When children have to work and save their money for a new toy, movie, book, or special treat, it teaches them to spend wisely rather than frivolously.   

5. Encourage Them To Save
Help them to understand the importance of saving money by having them save for something that is important to them. The will learn that if they spend their money right away, they will never have enough for something larger.

It is never too early for children to understand the value of a dollar. These lessons will stick with them as they grow into adults.

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