Money management skills taught at an early age set your child up for a healthy financial future. Teaching your child how to save, set financial goals and spend money wisely are all skills that he can use throughout life. Money management lessons for kids increase the chances of them beginning a savings account and investments at a young age, which leaves them with much higher earnings as an adult. Money management isn't a one-time lesson but rather a skill to practice with your child consistently throughout the years.
Step 1
Set up a savings account for your child. Take her to the bank with you so she sees the process of setting up the account. Let her go with you each time you take her saved money to the bank.
Step 2
Pay your child an allowance to give him hands-on experience at managing a small amount of money. Determine the allowance amount based on what you can reasonably afford and what you feel comfortable giving him.
Step 3
Specify how the allowance is used. You might require your child to put half of the amount in her piggy bank to save while the other half goes to a separate pot for her to spend.
Step 4
Ask your child to create financial goals relevant to his life. For example, he might want a new MP3 player, so his goal would be to save up the amount of money needed to buy one. Help his create a plan to put aside a set amount of money from his share of his allowance each week to reach the amount.
Step 5
Play a bill-paying game using play money. CNN Money suggests writing dollar amounts on the back of envelopes from old bills. Have your child divide up the money between the bills and decide what to do with any extra money.
Step 6
Show your child a simplified version of the family budget. This allows him to see where all of the money goes and what types of spending decisions you make for the family.
Step 7
Calculate your budget for groceries each time you go to the store. Get your child involved in deciding what to buy to stay within the budget.
Step 8
Show your child how you find bargains, save money and comparison shop when you need to make a purchase. Get her involved in clipping coupons, researching options for a big purchase and other money-saving activities.
