Up until they start earning a living, and sometimes well beyond that, kids are apt to spend money like it grows on trees. This lesson will help you put your children on the road to handling money responsibly.
Long before most children can add or subtract, they become aware of the concept of money. Any four-year-old knows where their parents get money–the ATM, of course. Understanding that parents must work for their money requires a more mature mind, and even then, the learning process has its wrinkles. For example, once he came to understand that his father worked for a living, a five-year-old asked, “How was work today?” “Fine,” the father replied. The child then asked: “Did you get the money?”
Instant gratification aside, once they learn they can buy things they want with money — e.g., candy, toys — many children will begin hoarding every nickel they can get their hands on. How this urge is channeled can determine what kind of financial manager your child will be as an adult.
It’s important to work on your child’s financial awareness early on, for once they’re teenagers, they less likely to heed your sage advice. And besides they’re busy doing other things — like spending money.