How to teach Children about the Value of Money?

Answer 1

Here are seven ways to help your literal thinker learn about money:

1. Piggy bank

Buy your preschooler, a piggy bank and give him or her a stack of coins to put in it. Ask your child to sort the coins in a variety of different ways -- shiny versus dull, big versus little. Know that he or she won't understand for some years that a rupee saved today can be better than a rupee saved when she is 30 years old, they should get a touch and feel of money.

I make my daughter pay money at the shop so that she understands the difference between coins, a small note and a big note. Supervise carefully, though, since sometimes, they still like to test things in their mouths.

2. Pocket money

For older children, establish an allowance so he or she can begin to make independent money decisions. Some folks will advocate linking the allowance to certain chores; I prefer establishing the basic chores (e.g., making the bed, cleaning their own room, and setting the table) as something each person does because they are a part of a family and it is their job.

Be very careful that they do not become too money minded and keep asking, "How much will I get for looking after granny when she is unwell?" However, giving your child 'extra' tasks (like washing your car) for which he or she can earn money can teach her the satisfaction that comes from working for a goal.

Your child will also understand that the more work that's done, the more money he or she earns -- a valuable life lesson.

3. Value inculcation

One customer of mine has done brilliant 'value inculcation' in his son. He gives his son 30 coins of Rs 5 each. The kid needs one coin every day at the recess. So, 22 of them are precious. He has only eight to spare every month. Now when the kid says he wants a new tennis racket or new tennis shoes, my friend quotes a price of say '12 coins', it takes his son about three months to accumulate the same. And he treats each Rs 5 coin with far greater care than a 500 note.

4. Introduce financial jargon

Get your older children to understand words like saving, investing, donating, pension, financial goal setting -- they will thank you in the future.

5. Bank account

Opening a savings account, touring a bank vault, using the rupee-counting machine, comparing prices, and paying for items and receiving change are a few everyday ways to learn about money.

6. Summer jobs

Encourage your child when he or she tries entrepreneurial ventures like buying crackers in the wholesale and selling in retail, baby-sitting for the neighbours, or starting a dog-walking service.

There's no substitute for learning on the job.

7. Lead by example

Last, but not least, be mindful of how you talk about money. Do you complain about bills, fret about money, and always use negative terms about finances? Don't be surprised, then, if your kids feel negatively, too.

If you need some financial refreshing of your own, make full use of your moneycontrol.com. Getting yourself on the right financial track is the best lesson of all for your kids.

So, parents, remember that some lessons still start in the home. Managing money wisely is one of them.

http://www.rediff.com/money/2006/sep/28perfin.htm

Answer 2

Get monopoly money and give her one months of your earnings. So if you make $5000 per month, give her $5000. Let her get really excited about how much money she has and talk about all the things you can buy for $5000. Then start taking away your expenses like rent, utilities, food, clothing, laundry, gas, car payments, health insurance, car insurance, house insurance, repairs, etc. And when she is standing there with only a few bucks in her hand, tell her how lucky she is to even be getting allowances, especially if she doesn't do any work around the house for any of the allowance.

Answer 3

They have to earn it, learn to save it to buy something they want, and spend it only on something they had to save up for. When they are spending mom and dad's money they don't feel the pain of letting go of the money. But when they have to work for money and then decide what the most important item is to spend their money on, that's when they learn the value of money.

Answer 4

Make up a chart with all different chores and different rates of pay for each .
Sit down with the child each week or month if you prefer and have them choose the chores they would like to do week by week .
Of course if they deside to do extra they show you , you both check off jobs done and pay acordingly.
No work NO MONEY !

Answer 5

my husband always gave our daughter little out door jobs like picking up sticks after heavy winds, raking the yard etc.
he gave her a little money.
teach them how to spend wisely. make good choices.
set a good example.
dont just give them lots of money for nothing.
teach them about savings.
teach them how if you save alot of money that u will have it for something big!!!
dont blow it as soon as u get it!

Answer 6

give them 10 for the week and if they use it all and ask you for more money for the weekend say no and they will learn i did