 We tend to think that children know exactly how we get our money. But we have to make sure that it is really the fact. We should talk to them about how we earn money, why we save and budget.It's an idividual matter when and at what age it is appropriate to discuss the following topics. But remember that such discussions must take place! Of course talking alone just won`t do as they will learn the most from the life experience. If your children do not have an allowance already, think about starting one so that they can they put your lessons into practice. At the beginning they will want to spend it. This is quite normal!
Sit down with your children and talk about money mattersm : things" they want to buy, saving etc. Even very young children can begin to understand the concept of earning money. Explain to your children that money is earned by working, and that you can only spend what you earn. What do hear every time you walk by a toy store? : "Please, please buy me this... !" Explain that people often save their money for items they want to buy.A simple savings lesson involves using a piggy bank. Make the lesson fun by having your children decorate the "bank," while explaining to them how you also use a real bank to save your money. Get your children to save a portion of their allowance for a special goal. Once your children have been saving enough to accumulate $10 or $20, take them to the bank to open their first savings account. Most community banks will allow children to open first accounts with low minimum deposits.
Why is to so necessary?
• You will be surprised how benefecial that could be for their financial eduacation and the development of smart and logical thinking
• They will learn that money doesn`t fall from heaven with the rain
• By means of a piggy bank they will learn about savings and interest. Set a savings goal to encourage your children to save some of their allowance. Calculate how much is saved each month and chip in a certain percentage as interest.
• It will be helpful for the future once your children begin earning their own money
• If they're old enough, your children will learn how set up a plan to save for their own goals
• You can agree on an amount of their savings that you'll "match."
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