Friday, November 25, 2011

The Advantage of Teaching Kids on How to Handle Money

The moment that the kids go to school, they will know how to read and write. Schools are also responsible to teach them arithmetic as well as other subjects but then even though they will tackle currencies and how to count money, most schools won't really teach them that saving money is important and the importance of how it should be used in life.

There are some things that are more important that what kids learn in school. In life, a person would always need to read, write and know simple math but the complicated ones won't really do much   in terms of computing how much the grocery items would cost. Teaching kids about money can be a great advantage because in the long run, it helps become responsible adults and practice good habits. If you start teaching your kids to save at an early age, it will become habitual and they will grow up knowing that money is hard to earn and should be valued.

Most kids who haven't been taught how important money is do not understand why some things cannot be bought for them while those who have been taught already will pout but will understand why some things are not worth it.

Opening a junior bank account for kids will do a lot. This is one technique that parents can use. Most of the time, kids enjoy knowing that they have their own ATM cards like their parents and would treat is as their prized possession. They will also enjoy knowing that whatever they save will go directly to that bank account.

There are some business minded parents that try to teach their kids to invest at such an early age. This is discouraged for kids who are below 13 years of age because most likely, they will not understand the trends and other terms for investment. Investing may be something more appropriate for teenagers to learn. If you have teenagers, it is recommended that you talk to them about their financial future because this is something they will affect them as they get older.

Giving kids an allowance will also give them an idea on how to handle money. Let them know that when they save up for something, they can purchase items they want. This will make kids more determined to save up their allowances to buy something which they think is important. It can be a toy or it can be something that would be best described as a want than a need.  They could also begin purchasing items they normally use to understand the importance of responsibility.  It will teach your kids that saving up for something is the best way to go. In the long run, they will incorporate this and other lessons about money in their lives.

Alex likes to blog about personal finance issues affecting the family and the average consumer, from savings to mortgages to managing your money. He also writes for an injury attorney blog.