Teaching Your Children About Money

I've often thought how wonderful it would have been to have had someone around when I was growing up to teach me about saving and investing. I first started working a real job when I was 16 years old. If I had known then what I know now, I would already be retired. That's why I think it is very important to start teaching children early on about handling their money.

You may have the money to buy your children everything they desire, but this really doesn't help to prepare them for life in the real world. It's much better to start teaching them, when they are young, to save a portion of all the money they receive and to put that money to work. It doesn't really matter how much money you teach them to put aside, remember to keep it simple and make it fun. If they receive an allowance or cash gifts for birthdays and holidays, allow them to enjoy spending some of the money, but have a piggy bank that is specifically designated as their own personal savings bank and get them in the habit of placing a small amount of all the money they receive in this bank. Once they've accumulated enough to open a savings account, take them to the bank with you and let them see how to open an account and let them know that their savings will be earning more money for them to spend later on.

As they advance in years, you may want to help them invest a portion of their savings in a few shares of company stocks. Something age appropriate that would appeal to their interests. If, for example, they like going to McDonalds, help them to purchase a few shares and explain to them that as owners of stock they will receive a portion of the company's profits. If they get a part time job in their teens, you may want to help them set up a checking account and teach them to read their monthly statements and balance their checkbooks. These are skills that will serve them well throughout their lifetimes and help guarantee a more prosperous future, no matter what profession they may choose.

Everyone wants their children to have a better life than they had, so it only makes sense to teach them the financial skills that will carry them through life and free them from dependence on wage earning jobs.