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Responsible parents have much to teach their children: from the early
lessons on "please" and "thank you" to such
subjects as responsibility in intimate relationships. Money management
is another important topic parents should address. Every child, whether
a toddler, teen or young adult, needs to learn to manage finances. Here
are some general suggestions you might consider (age ranges shown are
approximate):
Ages 3-6:
Children this age generally do not understand the symbolic or relative
value of money� that a dime is worth twice as much as a
nickel, for example. But this is a good time to start teaching them
the purpose of money � that it is exchanged for goods.
Suggestion: At this age, children should periodically be taken
shopping and allowed to buy a small toy or some other treat. Give the
child the money to hand to the cashier.
Ages 7-10:
Most children this age understand the relative value of different
coins and bills, and can start learning how to budget and save.
Suggestion: Give your child a small allowance and the
opportunity to make purchases. An allowance gives the child the chance
to learn from experience how far money will go. Help your child realize
that saving one week will provide more spending power the next.
Ages 11-14:
Children in this age group need more spending money; they start going
out with their friends and will want to buy food, entertainment and
some kinds of clothing in addition to toys and treats. It's a good
time to broaden their financial experience and increase their
responsibility.
Suggestion: Encourage these children to earn
extra money by delivering newspapers, raking leaves or performing
other suitable chores for relatives or neighbors. Now is the time to
teach them how to work out a budget and save for costlier items such
as compact discs and magazine subscriptions. It's also a good time to
begin learning the importance of saving for the distant future.
Ages 15-18:
By this time, most young people can handle many adult responsibilities.
Since a big part of adulthood is managing available financial resources,
they should be capable of making most of their personal financial
decisions with minimal guidance. Suggestion: Part-time employment
can give young adults the income they need to increase their sense of
financial responsibility. They should be earning and saving to help pay
for major personal purchases such as shoes, clothing, sports equipment,
and even a first car or college education.
Ages 19+:
Your child will be in college or working at a full-time job at this
age. Sound financial lessons learned throughout childhood should help
a young adult face independence with more confidence. However, your
child can still benefit from your experience with money matters.
Suggestion: Share your financial experiences with your child.
If you have a good relationship, questions about taxes, credit and
investing may come up. In some situations, you or your child may need
the assistance of a professional advisor. But if you helped your child
develop sound financial habits early, his or her basic "money
sense" will last a lifetime.
Source: Article via Mutual Of America website
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