Teaching Children About Money |
Money is an essential part of life; teaching children how to manage it wisely can help them develop beneficial habits and skills for the future. These tips will help parents teach children about money in a fun and practical way.
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Start early. Even before they can count, children can learn the basic concepts of money, such as saving, spending, and earning. You can use toys, games or real coins and bills to introduce them to the different values and functions of money. For example, you can play store with them and let them buy and sell items with pretend money. Or give them a piggy bank and encourage them to save some of their allowance or gift money and then deposit it in a savings account.
- Be a good role model. Children learn a lot from observing their parents and caregivers, so make sure you set a good example of how to handle money. Show them how you budget, save, invest, and donate your money, and explain why you make certain choices. You can also involve them in some of your financial decisions, such as planning a family vacation or comparing prices at the grocery store.
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Giving an allowance. Giving children an allowance is a great way to teach them about money management and responsibility. You can decide how much and how often to give them money, and whether they have to earn it by doing chores or not. You can also help them divide their allowance into different categories: spending, saving, and giving. This way, they can learn how to prioritize their needs and wants and how to balance their short-term and long-term goals.
- Teaching credit and debt. It’s important as children grow older to teach them about the benefits and risks of using credit, borrowing money and understanding how to avoid debt. You can use examples from your own experience, or from the news, to illustrate the consequences of good and bad credit decisions. You can also help children practice using credit wisely by giving them a prepaid card or a small loan with interest they must pay back.
- Make it fun. Teaching children about money doesn’t have to be boring or stressful. You can make it fun by using games, apps, books, videos, or other resources that are designed to teach financial literacy in an engaging way. By making the process of learning about money fun can help your children develop a positive attitude toward money and a lifelong interest in financial education.
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Global Money Week is an annual initiative that aims to raise awareness and inspire action on financial literacy and inclusion among children and youth. This year, the theme is "Take care of yourself, take care of your money," which emphasizes the importance of safe and responsible money management. Global Money Week has reached 60 million children and young people since starting in 2012, with 120 million people reached in 2023 alone. This initiative takes place March 18-24, 2024.
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So, what should children learn to help protect their money? Here are some ideas:
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Set a budget and stick to it. A budget is a plan that helps you track your income and expenses and allocate your money to your needs and wants. It can help you save more, spend less and avoid debt.
- Learn about different financial products and services. Many options are available for saving, investing, borrowing, and transferring money. You should compare them and choose the ones that match your goals and situation.
- Protect yourself from fraud and scams. Scammers use various tactics to trick you into giving them your personal or financial information or sending them money. You should be wary of unsolicited calls, emails, or messages that ask for your details or offer you something too good to be true.
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Seek advice from trusted sources. If you have questions or doubts about money matters, you should consult someone with the knowledge and experience to help you. This could be a family member, a friend, a teacher, or a professional adviser.
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Remember, money is not just a tool for survival but also a means for achieving your dreams. So make it count!
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Check out the March edition of Financial Friday, Oklahoma Money Matters' online personal finance question and answer forum. This month, we’re answering a question about giving your children an allowance.
As always, if you have money-saving tips you'd like to share, send us an email at OklahomaMoneyMatters@ocap.org or submit a personal finance question for a future edition of Financial Friday.
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Mark your calendars for upcoming OKMM "Make It Count" webinars on the third Tuesday of every month. Join us, Tuesday, April 16, for Taxes 101. Understanding the complex IRS tax terms is one of the most challenging things about filing taxes. There's plenty of tax terminology to learn, and you need to know it to provide the correct information on your tax return. Register to attend here:
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We offer webinars for educators, students, and parents on budgeting, saving, credit, and more. If you want to schedule a webinar, complete our workshop form, and we'll contact you to plan the details.
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