Monday, August 13, 2012

How to Teach Your Grandkids About the Value of Money

As a grandparent, many assume the role of teaching valuable life lessons to their grandchildren. While this responsibility also falls on the shoulders of the parents, it takes a village as the expression goes. So the question becomes, how can you teach them important lessons that can really benefit them as they grow up? While it might not be easy, teaching them an ideal like the value of money is a great place to begin.

The trouble is, many people do not know how to express this to younger children. This can prove to be a difficult point to get across, especially when there are similar ideals missing from the equation. However, this article should introduce you to a few ways that you can begin teaching them this priceless lesson.

Chores
Many experts suggest that one of the most effective ways to introduce children to the importance and the value of money in their lives is to have them earn it somehow. Chores are a great way to exercise this point. You simply map out age appropriate tasks for them and in exchange, offer an allowance at the end of the day or at some appropriate time. This can teach them responsibility and the exchange of working for the money they can later spend.

Rates of Pay
An important thing that children seem to take a long time understanding is the amount of money an adult has at any given time. This can be a lesson that is taught by explaining a daily rate or an hourly rate (for older children). This can allow them to start putting together the fact that the amount of money someone has is relative to how they have worked. If they make 100 dollars a day for instance, and they only work 4 days one week, then they will have no more than 400 dollars.

Paying Up
Allow your grandchildren to witness you paying bills or buying things at the store. Help them to find the appropriate amounts for the order. Show them that each bill has different values, and that within only a few activities, this collection of money can be gone. This can help them appreciate that a lot of money goes to bills, utilities, food and more every month.

The Goal
Allow them to choose one larger item from the store that you are willing to buy them if they were to work off the amount that it costs. This will help them to appreciate the exchange of working for monetary amounts, and the amount of work that is relative to purchase even one thing. If this is a new game, a CD, a toy or whatever the case might be, it is not going to be something they barely do anything for. Consider monetary amounts for different chores and activities around your house and their own house. Get the parents involved in keeping track of their progress when you aren't there. When they have reached the goal, they can get the item. You can start over with a new item, and continue the lesson.

While these seem a lot like introducing children to working for money, that is a huge part of valuing amounts and what those amounts can purchase. It keeps them from making mindless purchases as often growing up, and helps them to be better stewards of their own finances because they remember working hard for what they have.


Johnathan Rodriguez writes about parenting, finance & health insurance quotes.

4 comments:

  1. I like this post, the best thing is the idea to allot a work to child according to his/her ability and then pay some money as per their task. It will definitely help then to learn the value of money.

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  2. If you don't teach the children to work for their money they will be at your doorstep whenever they need something. Teaching them self reliance is good for them and keeps them out of your pocket.

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  3. Judging by the amount of greedy and entitled kids and young adults these days, more people need to read this article, not just grandparents. You have to work hard for what you get, and appreciate what you have. I'm grateful to my family for helping me see that I CAN make my own money, and I appreciate the things I buy more because of that. Great, thought-inducing article, Johnathon.

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  4. Teaching your kids or grandkids good money habits saves them from a lifetime of foolish mistakes. I look at it as I am not only helping them but also myself.Remember if they can't manage their own money, guess who they are going to run back to when they mess up.

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