Help your child learn to earn, save and spend

August 06, 2010|By LYNN LITTLE

You teach your children to say "please and thank you," and you encourage them to eat their vegetables.

But do you take time to teach them how to manage money?

Children of all ages need to learn about earning, saving and spending money.

Consider giving your child an allowance. Let them take control of their own money and make their own decisions about what they want to do with it. If they are never given any money, they will never learn to manage it. Children learn by experience and example.

To help children develop money skills, it can be helpful for them to have ways to earn money at home. Give them extra opportunities to earn money that go beyond doing chores. Consider developing a list of household jobs that you are willing to pay your children to do. Look around your home and yard to think about specific jobs that would help you and provide a chance for your children to earn extra money.


Earning money and then having the freedom to choose how to spend the money teaches multiple lessons. Talk to your children about the difference between needs and wants. Parents provide needs such as food and shelter; children can help buy things they want such as new toys.

Teach them about budgeting their money. Encourage them to list things they want to buy and/or do with their money. Help your children project how much items will cost and whether they have enough money now or if they need to save in order to have the things on their list. Children practice delayed gratification when they save money they earn toward something special they want.

Help your children see the worth of what they buy in terms of the work that is required to earn money. For example, a teenager who is paid $7 an hour needs to work at least three hours to buy a $21 music CD.

It is also important to let your children learn from their mistakes. Don't bail them out. If they are saving money for something they needed and end up spending it on something different, don't get it for them. Not all purchases will be as satisfying as they expected.

Talk to your children about money and help them to practice money skills. Here are ideas to consider:

While at the grocery store, have preschoolers help shop for items pictured on coupons. Talk about how coupons help save money.

Older children can compare the cost of an 8-ounce serving of different beverages and select the best buy.

It will soon be time for your children to purchase school supplies. Have them look through store ads for the best deals.

Let a child plan a family outing or event that fits within a budgeted amount. Encourage creative ways to do fun activities with a small amount of money.

An older child can be responsible for tracking spending during a family vacation.

Open a savings account for your child at a financial institution that offers an account with no monthly fee for children. Encourage your child to save a portion of money earned from chores and other activities as well as a portion of gift money they might receive.

Take time to talk to your children about money and to give them opportunities to develop lifelong money management skills. Teaching your children about money can be easy, a fun and valuable experience.

Lynn Little is a family and consumer sciences educator with University of Maryland Extension in Washington County.

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