Teaching Children On How To Handle Money
- Posted by MetropolisMom on September 9th, 2008 filed in Smart Parenting, Teens
Jill, our 11-year-old daughter, does not understand the value of a dollar. She squanders her allowance on ridiculous things, like comic books and candy. She never saves. Despite having several talks with her about this, nothing has changed. Here are some tips on how to get her handle money maturely:
First of all, remember that it is better for her to make financial mistakes now, not when she gets her first credit card.
It sounds to me as if there are other issues being played out here. A child this age is looking to exercise a greater degree of control over her life. Spending her allowance on things that give her immediate gratification is on way of doing that. If you make an issue of how she is spending her money, then money will take a greater symbolic value. Buying comic books and the like will become, paradoxically a way for her to demonstrate, if nother maturity, then at least her independence from you.
One of the most telling moments in a child’s financial education comes when she decides that she wants something that will cost more than just one or two weeks’ allowance. That is when you can help her develop a budget that will enable her to predict when she will have enough to buy the coverted item.
Help her with the arithmetic and the options. What if she were to buy one fewer comic book per week? How long would it take if she put aside half her allowance? Or one third? This may be the first time she hasever used arithmetic to solve a truly meaningful problem.
If she does decide to save part of her allowance, I recommend that she open up an account at the First National Bank of Mom and Dad,which will offer her exorbitant interest rates-perhaps-25 percent per week! (After all, the sums are paltry, and if she deposited her allowance in a real bank, the interest would not be high enough to make it rewarding for her.) In exchange for earning this prerferntial rate, however, she should have to make up her own passbook and do all the calculations herself.
Leave a Comment