It is never too early to teach kids about money. A very simple education in money gives young kids the ability to make better quality decisions about their current and future circumstances. One should never ignore the education and motivation of children in this area. Teaching them to spend money wisely gives them the power to own all the things on their wish list.
The moment a child knows how to count, he or she needs to be introduced to the concept of money. Reputation and observation will become a very important tool to use when teaching children.
Goal setting is another very powerful tool that children can use when working with money and a good way for teaching kids about money for parents. More often than not goals that have been established are normally achieved. Instead of relying on parents to buy toys, the child can set this as a goal for him or herself. This is a very good lesson in responsibility.
One should always communicate the values of the coins or notes that should be applied to money and teach them from the start on how to spend money wisely. One should also teach a child the difference between needs, wishes and wants.
If you give them pocket money, give it in denominations that will encourage them to save. Parents should encourage them to save at least one dollar for every five dollars of pocket money received. This could add up to quite an amount of money for the child to use in a few years. It also develops good saving habits from a young age.
As soon as possible, the child should open up a banking account. This will make them adopt a serious attitude about money. Should the child wish to withdraw money he or she should not be discouraged. Doing this can demotivate the child from saving in the first place.
Teaching children about money should be a top priority in any parent's books and will give kids a brighter financial future.