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kids and money what they Do the children in your life think money grows on trees? Do they think it comes from the machines in the bank parking lot? Do they know you have to work for it at your job every day? When it comes to teaching children about money, the sooner the better. The Lesson Plan Nan Mead, former director of communications for the National Endowment for Financial Education (NEFE), offers parents some guidelines for teaching money concepts to children. The following teaching ideas were taken from the NEFE brochure titled "Simple Steps to Raising a Money-Smart Child:" Ages 2 to 4: Yes, even toddlers should be taught some money basics. They can be introduced to the concept of money as a medium of exchange and start learning to identify coins and cash. Mead says it's also a good time to introduce the concept of saving. She recommends you encourage your child to save some money in a clear glass jar. (She advises against using an opaque piggy bank. Your child might think the money has disappeared if it can't be seen.) You may even help your child set small savings goals to teach that saving gets us what we want. For example, your child might save for a box of crayons. Teach children the difference between needs (what we have to have in order to live) and wants (what we'd like to have).

Ages 5 to 7: When children start school, it's time to begin a weekly allowance. Once they have some discretionary money, they can learn about shopping and making spending choices. They can also learn about the consequences of those choices. Teach them the difference between needs (what we have to have in order to live) and wants (what we'd like to have). It's also a time to introduce some of the mechanics of our economy. For example, dispel the youthful myths that plastic cards equal money and that $20 bills come out of machines just for the asking. Ages 8 to 10: Parents can begin sharing how they budget for the family and meet their financial obligations. Consider letting your child observe or even assist you while you pay the family bills. In addition, set up a savings account for your child. Around this age, children usually have the math skills to comprehend how their principal is growing and how they are earning interest. Help your child visualize these concepts by reviewing account statements together. Ages 11 to 13: Children are able to think more abstractly at this age, so begin talking about market concepts and investment principles. Drive the concepts home with hands-on lessons, like


tracking stock in companies they recognize. Ages 14 to 18: This is your final chance to prepare your child for the real world. Provide the opportunity to have real-life experiences like working outside the home, managing a checking account, and using a debit and/or credit card. Share information about using insurance to help them manage risk at this age. Parents play a key role in children's financial success. If children grow up learning how to manage their money wisely, they will more likely avoid the pitfalls that often rise before them as adults. Three times as many children under 10 have bank accounts than their parents did at that age. -- 2010 Survey, Money Management International Information courtesy of Financial Finesse, the leading provider of unbiased financial education.

Kids and Money: what they need to know and when  

Your loved ones depend on your ability to earn income to meet the demands of day-to-day expenses, as well as long-term financial commitments...

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