KIDS + MONEY MANAGEMENT = POSITIVE REINFORCEMENT

Teaching your children early about the importance of managing money and savings can help build confidence, teach fiduciary responsibility, and impart conscientious and empathetic stewardship. Our current economy dictates tightening our belts on family spending, so it’s is a good time to discuss “junior creative finance” with your children. Discuss how you can save by just pinching a few dollars here and there and set budgets for mom, dad and the children. If you eat out a lot, consider setting a budget for each child which would include food and necessities and allow them to pay for themselves at the store so that they can learn about making wise choices on their purchases. If children have no concept of how much something costs, they are not able to rationalize the difference between a more expensive item and the lower cost items. (See below for great ways your kids can learn about cost comparison and how to save and manage their own money!)

Teaching your children about money can also help give you some creative tools in helping discipline your children’s spending. Utilizing a points system is an easy way to help your children earn money as rewards and lose money for bad behavior. Below are some different ideas but depending on the age of your children and the style of your family you can develop a system that works best for your children.

Here are some guidelines for creating a “rewarding” money management system that puts the child, his money, his family, and the community in perspective, as related to learning personal fiduciary responsibility:

CREATE A VISUAL COST COMPARISON
Use “points” for good behavior and deduct points for bad behavior. When the child has accrued enough points on his good behavior, set the points cards on a table and then lay the dollar amount beside the points cards. Explain to the child that his good behavior resulted in that many points and those points equal that much money that he can take to the toy store and buy a toy. Once in the store, the child can see the price tags on toys and learn what he can buy with his money. Cost comparison challenges can be taught “on site” and the child can learn to make wise decisions on spending money.

THE IMPORTANCE OF SAVING MONEY
Teach your kids at an early age the importance of savings. Show the child the documents on your savings account or even their college savings account. You could also consider assigning a percentage of their earnings to go towards savings.

THE MORAL IMPACT OF TITHING AND GIFTING
Teach your kids at an early age the moral impact of tithing and gifting. Explain to your child that it is important, no matter how much or how little money they have, that some of their money should be gifted to their church or synagogue or to charitable venues – or even to a friend or neighbor in need.