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We can tell kids about saving for retirement until we are blue in the face- when it comes to teaching children about money, it can go in one ear and out the other.
Teaching our children about the value of money is going to help them make sensible financial decisions throughout their lives.
What does it take to teach our children the fact that money doesn't grow on trees, but has an intrinsic value attached to it, not just in money, but in the value of hard work?
You may think about giving them pocket money, but if you want to go one step further, you will have to show them what it takes to save up for something that they want. This is especially important if they want to save up for something that is beyond their weekly wages.
But remember, not all money is created equal! You can show them the value of an item that is a coin, such as the 2021 Morgan dollar, but the cost of a 2021 Morgan dollar coin is not a dollar!
And you can further break this down into pennies, and dollars, but show them what X amount of pennies and dollar notes can buy that they want. You can then go one step further and help them to realize that if they really want something incredibly expensive, that they have to save a certain amount of coins and dollar notes in order to achieve it.
However, it's important to gently guide them towards earning enough to buy an item that is cheap enough and within the budget. Because you could ask them what they want for Christmas, and encourage them to save up, but if it's something that will take them years in pocket money, this is not going to send the right message right away.
You can do this as soon as they are able to understand the concept of reward. You can incorporate the idea of rewards for things that you would like them to do, for example, tidying up after themselves.
And as they get older, they can earn extra pocket money through chores, like raking leaves or washing the car. And as they get older, you can turn pocket money into an allowance, which will give them an opportunity to look after their money.
There are many tools online that can help children learn the concept of money, and what it takes to save for a certain item. When your children are too young for a bank account you can still give them an allowance or pocket money, based on the concept of chores and rewards.
Teaching our children the value of money is so important, especially if children think they can get money for nothing. It's so important to start this as soon as possible because it makes them understand that money has an actual value attached to it.
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