Smart spending and saving habits begin young and there's no better time than now to teach your children how to manage their finances. Read this article to discover how to impart financial wisdom to your pre-teen.
Have Your Kid Plan a Meal
Groceries are a huge part of an adult's budget - why not start now by having your kid plan, shop for, and prepare a full dinner for the family? To make it more of a challenge, put a budget on the dinner (like $2 per person). Another lesson that you could teach at this point is how to comparison shop between brands and also the value of clipping coupons.
Make Allowance Day Once Per Month
To teach the concept of saving for longer than a week at a time, start paying your child's allowance once per month instead (or, if you want to start smaller, try starting with every other week). This will teach the concept of having to live between paychecks and how it is important to save money. One easy way to make this work is to time your child's allowance with the same day that you get your paycheck.
Have Your Pre-Teen Buy Their Own Entertainment
Make a list of items that you will no longer purchase for your pre-teen, such as movies with friends, birthday gifts for friends, and CD/DVD and other entertainment items. Then, calculate how much you would normally have given them for these items (for example, $30 per month on average) and let them manage that money as part of their monthly allowance. The trick to making this work is to not bail them out if they spend all of their money by the 2nd of the month.
The Concept of Plastic Money
Teach your children to manage a debit or credit card by first giving them a pre-paid card that is loaded with their allowance money. They will have to track their expenses to make sure they don't run out of money on the card (much like balancing a checkbook).
A Sense of Appreciation
One of the more motivating lessons for a pre-teen can be seeing what it would be like to not have any money. To help teach this lesson and give back to the community at the same time, have a family volunteer day(s) where you and your child serve food at a soup kitchen or help out at a homeless shelter. It can make a big difference in the way your kid views the world.
How To Teach Your Kids Good Money Habits
Many of the bad money habits that adults have are a result of how they dealt with money as a child. If you can teach your children how to manage money responsibly at a young age, then you will set them up for success later in life.