To understand the value of money, kids need to practice spending and saving.

It’s hard for kids to understand the value of money without having some of their own. They need to practice spending, saving and making money decisions. Kids who don’t get practice have much more difficulty learning to use money responsibly when they grow up. And all it takes is consistent work and effort.

Allowance

Some children get practice spending and saving with an allowance. How many of you give your child an allowance? Are they allowed to spend the money any way they want?

Gifts

Others rely on:

• Gifts they receive for birthdays, holidays, or religious celebrations
• Rewards for exceptional performance or good grades

Odd jobs and Part-time jobs

Think about giving your children the chance to work for money doing odd jobs around the house. For young kids, it can be simply making their beds, putting their clothes in the hamper at the end of the day, or cleaning their rooms.

Encourage older kids to:

• Babysit
• Mow lawns
• Get a part-time job at the grocery store or ice cream shop

Working for money really drives home this fundamental concept:  Kids have the power to earn money to get what they want—a simple candy bar… a video game…a pair of name brand boots…designer jeans…or other things you may not be willing to pay for.

Work that fulfills responsibility

Of course, we want our children to understand and appreciate that some work has value beyond money. Taking on responsibility is a part of belonging to a family or a larger community.

For children, fulfilling personal responsibility begins with small steps such as:

• Clearing the table
• Cleaning their rooms
• Putting clean clothes away
• Making their beds

Work that earns money

Some parents pay for work that is above and beyond daily chores. Now we’re talking about jobs like:

• Raking the yard
• Doing the laundry
• Washing the car
• Cleaning the garage

Every household and family operates differently. Decide what jobs or responsibilities you feel most comfortable categorizing as a chore vs. something worth paying for. Be clear with your children when you ask them to do a particular chore. Is it part of their responsibility as a member of the family? Or is it a job that’s worth extra money?

Ordinary tasks become teachable moments.

It’s not difficult to find opportunities to talk about money or to discuss financial concepts with your children if you simply share with them what you are doing and why. Tell them you want them to know how to make wise money decisions when they grow up.

Talk about these financial concepts when you’re at the bank, using a credit or debit card, paying bills or balancing your checkbook.

Here are some ideas

How many of you take your kids grocery shopping? Next time they are in the store with you, show your child two similar items. Point out the difference in the cost and the difference in the products. Ask which one they would choose and why. If you don’t agree, explain why you’re choosing the other one.

If you have teenagers and they want to buy something at the mall, like back-to-school clothes, give them an amount of money you are comfortable with. Let them know they can keep whatever they don’t spend. See if they were more spend conscious than they would have been if you had just paid for the clothes with your credit card.

At restaurants, compare the prices of different meals. Talk to your kids about tipping and, once they’ve learned enough math, let them figure out the tip for you.

About the Author: Veronica D Vasquez has been a finance professional for over 25 years, and is currently with New York Life Insurance Co. Her mission is to empower parents with simple tips and tricks to teach their children financial literacy – concepts not taught in the classroom. She is a proud single mom of two grown college graduates.

Veronica D Vasquez
Agent, New York Life Insurance Company
CA Insurance License # 0M67964
801 N. Brand Blvd., Penthouse, Glendale CA 91203
Cell:  626-429-2454 / Email: vv******@ft.com
www.newyorklife.com/agent/vvasquez.com29