Teaching your kids to manage money is one of the most important skills you can pass on. Unfortunately it is often one of the most neglected skills as well. People are uncomfortable talking about money even with their children. Some parents may not have the skills to pass on to their children. The sooner you talk about money and begin teaching, the easier it will be to address the harder aspects when they are older.

Earning Money

1. One of the most important things you can teach your children is that money must be earned. This can start at a young age when you have children complete jobs around the house to earn money. An allowance that you just give to children may undermine the opportunity for them to realize that they earning money does take effort.
2. As your child grows up, help her to look outside the home for ways to make money. You can pay for your child to attend a babysitting class and become infant/child CPR certified so she can begin babysitting. Talk about ways she can market her skills. If she is not interested in childcare you may encourage to find a hobby or skill that she would like to develop such as tutoring, cleaning or cooking for others. Yard work is always an option.
3. When your child is a teenager you will need to decide how much money to provide to cover things from gas to clothes to fun money. You may agree to provide this amount as long as he keeps up his grades and not have him work during the school year or you may decide he can only work as long as his grades are high.

Budgeting Boot Camp

Budgeting money is an important skill, but most young children are not able to comprehend and plan this way. When your child reaches middle school or high school you can begin teaching him how to budget. This can be done in a few ways.

• Give a set amount for your child to spend on specific purposes. For example, you may agree on a $300.00 back-to-school clothing budget at the end of the summer. Once she has spent it that is all the clothes she gets unless she earns the money herself.
• Give a monthly allowance to your child to cover all of her needs. Mint.com recommends this as a great way to promote personal responsibility. Sit down with your child and talk about the monthly expenses she has including lunch money, weekend activities, clothing, and toiletries. Decide what a reasonable amount is to cover theses expenses and give your child that amount at the beginning of the month. Do not bail your child out once she runs out of money. If she runs out of lunch money have her brown bag her lunches for the rest of the month, and let her deal with the consequences of not having money for the rest of the month. After a few months she should be able to balance her spending and make wise choices with her money in the future.

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