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How Much Your Kids Must Know About Family Finances?

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					          How Much Your Kids Must Know About Family Finances?

Experts say that most parents don’t teach their kids a thing or two about finances because they
think that they are just children and they wouldn’t understand any of these things. This is
obviously a wrong approach because of the fact that handling money is one of the critical skills
a child must have when he or she grows to become an adult.

Often times, parents are uncomfortable talking about money in front of their children and they
have no idea whatsoever how to explain it to them in their level of knowledge in a realistic way.

Simple things can be done to help your child understand money better:

1. Be open to them- the best way to talk to your child is to openly tell them about the issue and
allow them to ask questions to satisfy their curiosity. If you had an increase in your income, tell
them about it and explain to them that you will be using it to pay for your bills or even your
debts.

2. Bring them along- by simply bringing them with you when you go out grocery shopping you
can teach them about budgeting by letting them do the computations and even compare the
prices. This will seem like a fun activity to them but they’re subconsciously learning more about
their finances.

3. Cards and loans- kids are often told that credit cards are used only for emergencies but they
actually don’t know why and what they have in mind is that it is unlimited money. Explain to
them the importance of doing a credit check; also the benefits of having a healthy credit rating
such as, easier loan applications, lower interest rates etc.

4. Allowance- this is the first time in knowing whether your child can handle his own money or
not. Before handing this out, explain to them that they have to budget everything within a week.

5. Saving- get your child his or her own piggy bank and encourage them to save an amount of
their allowance and put it directly to their bank. You can even open a bank account under your
child’s name and have them deposit their own money regularly.

6. Let them use it- it is important that they experience spending their money as well. They will
value the items even more knowing that they worked hard for it. Let them withdraw their money
every once in a while but be sure to guide them and keep them from overspending.

7. Set limits- let your child know that he or she would have to comply with your rules when it
comes to money. For example, if they send all their allowance immediately, none will be given
until the next allowance-day arrives. Be strict about your rules and they will truly understand the
meaning of discipline as well as the importance of financial responsibility.

Joy is an active blogger who is fond of sharing interesting finance management tips to
encourage people to manage their personal finances. More specifically, she advocates that
people check their credit scores regularly. Follow Joy and discover how parents can teach
children about finances.

				
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Description: Experts say that most parents don’t teach their kids a thing or two about finances because they think that they are just children and they wouldn’t understand any of these things. This is obviously a wrong approach because of the fact that handling money is one of the critical skills a child must have when he or she grows to become an adult.