Saturday, June 23, 2012

Important Money Lessons for Children

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I saw this fantastic graphic on Pinterest via the President's Advisory Council and thought it was worth sharing. Once our kids turn 5 years old, they begin receiving an allowance. Money seems to be a hot topic around our house as we strive to teach our kids the importance of spending wisely and the benefits of saving.

Here are some highlights on the image:

Age 3-5 Years:

  • Money is earned by working
  • Different between needs and wants

Age 6-10 Years

  • Spending money is all about making choices
  • Saving money in an account yields an increase from interest

Age 11-13 Years:

  • Save 10% of all money you receive
  • A credit card is a loan and you end up paying more than the original loan because of interest

Age 14-18 Years:

  • Avoid falling back on credit cards to pay for things you don't have the money for now.
  • Paychecks end up being smaller than you think because we all have to pay taxes.

Over 18 Years old:

  • Continue to put money into savings each month, no matter how small the amount in an effort to save 3 months' worth of living expenses for emergencies.
  • Only use a credit card if you can pay off the full amount each month. 
Those of you with older children: do you have anything to add? I'd love to hear your thoughts! 

1 comments:

April said...

THe book "The Money CLass" by Suze Orman is fabulous with great ideas and examples we are going to use! Like ages 3-6 you teach them that you have to work to get money, what you use money for, and why you go to work. Don't say things like "I hate going to work but I have to," because that teaches them to hate money and work because it takes you away from them. Also a few times a year teach them giving, like have them pick some toys to help take to those who need some. When they are 6-10 instead of an allowance, call it work pay so they don't feel entitled to receive it. There should be certain chores they do free just for living there like cleaning their room. Other chores should be on a rising scale, the harder the chore the more it pays but they have to start at the bottom and work up, they can't just jump to the highest paying job!
When they are teenagers, stretch their pay to 2 weeks instead of every week, take out some of their personal expenses, have them help pay some bills, show them how it works. Let them use a credit debit card and then look at statements with you, basically TALK and SHOW, don't act like money is a big secret! The whole family should be involved :)

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