Young Teen Girl Counting Her Money

Recently, More4kids did an interview with an author who writes books on teaching children, particularly teenagers about money. You can read the interview here the interview on teaching kids about money with Randy Loren. I have to say that I learned a lot, I also learned a few things that I was doing wrong and a few things that I was doing correctly. While I don't want to take away from the interview I do want to offer you a few tips on how to make sure that your child understands the value of money.

Tip One: Pay Them an Allowance

I know that there are a number of parents out there that give their children an allowance. Note that my tip is to pay them an allowance. I say pay because they need to understand that money has to be earned, it isn't just given to you because you are cute. You can start paying an allowance when kids are 3 and 4. Trust me when I tell you they understand that money is a good thing. So pick one thing that they can do each day to get paid for. It can be making sure all of their crayons are put away neatly in the box. Just make sure the money is tied to a task.

Tip Two: Teach them Savings

You would be surprised at the number of kids these days that do not know what a piggy bank is. It can be an empty coffee container with a slit cut into the top. Teach your kids that saving is important. Start when they are young. In our house, our children are made to split their money into three equal parts. A third they are to save, a third they can spend on whatever they want and the final third is to be donated to a charity or organization that they feel needs the money. Our son donates to the Nets for Africa because it is important to him that kids don't die, and our oldest daughter donates money to different animal shelters because that is where her passion is.

Tip Three: Talk to Them about Money

My husband and I made the mistake of not telling our kids when money was tight. Kids don't understand the cost of living. That electricity costs money, that food costs money and that the roof over their head costs money. No you don't have to tell them how much each bill is and let them know whether or not you are able to pay your bills on time, but they need to understand that there is a price associated to everything that they have in their life. READ More on Parenting Tips: Making Sure Your Children are Financially Literate