For many families, discussing money and bills is a taboo subject reserved for adults only. Many children, therefore, do not understand where money even comes from or even what it is, let alone how they can contribute to the household.

Now it may seem silly to think of an elementary schooler contributing. However, their “job” is to learn and play, tidy and complete household chores assigned by their parents. Mom and Dad have their own jobs, which should be explained even to the young.

Money can be introduced through play. There are many educational and enjoyable board games which use imitation money. Flash cards accompanied by coins and bills can introduce real-money. Monetary values can be taught by placing money out on a table and making “equal value piles” contained within their own dishes. Four quarters can be placed beside a dollar bill, ten dimes, and the like. To add incentive, the money learned can be “earned” and given to the child.

Some families set up a visual chart with monetary values for chores. Thereby children “earn” their own money. Less popular tasks can be allotted a greater pay-off. This incentive-based method does not need to break the family budget, either. Young children can learn much by accumulating dimes, nickels, quarters, and even pennies. This method could be used instead of the traditional allowance. Some families find children willingly complete homework and strive for better grades when given financial incentives.

Percentages can be taught even early on as well. For instance, it can be arranged that as an allowance, a young person might be given $10 a month. However, it then could be expected that ten percent of that money be put into a savings. (Passbook savings are especially nice for the young, but a financial institution would best be able to recommend an account) Some families further expect an additional percentage be donated to a charity. This is a simple way for a child to learn unselfishness and civic-mindedness, as well as serving as an introduction into the inevitable world of bills and the value of saving.

Distinguishing between wants and needs is another imperative skill. Children need clothing, for example. They do not, despite fervent assertions, need the latest fad. Thus some families set up a review of needs and wants. For example, parents give children a reasonable shoe budget. Each child is then responsible for chosing a pair. If a child feels it necessary to purchase upscale shoes that costs more than the agreed-to price, it is then that child’s responsiblity to cover the additional expense. Services such as cellular telephone plans, texting, and internet access can also be reviewed in this fashion if appropriate in the parents’ estimation. This allows the child to discern the value of the goods and services and the difference between wants and needs.

A solid understanding of the value of work and the expenses of living are life skills that parents are in a unique position to impart to their children.

Author Bio: Christine writes about a variety of topics. For more information visit http://business2financial.com.

Category: Family Concerns
Keywords: business, finance