Raising Financially Aware Children - Money Management for Kids

In this era of living paycheck to paycheck, it is only wise to teach our children about money and finances at an early age.  In addition to instilling financial responsibility, it will also help with everyday math and decision-making skills.  Here are a few good tips to start with:

1)  Give your children an allowance each week for doing age-appropriate chores around the house.  You could also give "bonus" incentives for good school grades.  Set the terms of the allowance to be received, and make it clear and concise to the child.   Example for a  6 yr old child:  Make his/her bed daily, and keep their room clean.  Set the dinner table daily, help with pets, pick up the yard, help clear the dinner table, or take out the trash.  If all their chores are completed each week, give them their full allowance; if anything is missed, or not completed, deduct some from the allowance.   Explain that this is the way a job works, you get paid for what you do, and don't get paid if you take time off.  

2)  Build math and money skills early on.  Sit down with your child and go through the money relationships, i.e. four quarters = $1.00.  When the child has a good grasp of this concept, next time you go grocery shopping, let them pick out some of their cereal, snacks, drinks, etc.  Set a dollar limit for the purchases and let them go.  When they are finished, review their selections with them.  You can discuss alternative choices to save money, or to stretch the budget further.  For example, the child chose a 12-pack of A & W Root Beer.  Show them that by buying the store or generic brand of root beer they could save X amount of money.  Same with snacks and cereal.  This will make them a more thrifty shopper.   On another note, while shopping, have them check for expiration dates on specific items such as milk.  Explain the importance to them.