Do your kids know the value of a dollar? In an age when parents whip out the plastic to pay for things, or the ATM seemingly spits money into your lap with no repercussions, it's hard to teach kids about managing money. But in today's economic times, it's important, and leading by example is, too. Before you even launch into a lecture about spending wisely, examine your own habits. As you withdraw money from that ATM, explain to your kids where it came from and that you earned it so they don't simply think anyone can get however much money they want. Try to pay for more items with cash instead of credit cards, and explain again to your children that you must earn money to pay for items that you charge. Most experts agree that age five is a good time for children to begin managing their own money. Attach a dollar value not only to their regular chores, but also to extra duties they can take on if they choose.
In fact, experts recommend not giving money for absolutely every chore done around the house. Everyone needs to pitch in and understand that they must do their part as family members. As they amass money, preferably in a clear bank where they can see it, create a "mock" trip to buy items, marking toys and other household items with a dollar value and helping the child make a decision on what to "buy." Then make change. As the child takes these lessons out into the real world, help him make purchasing decisions. Might he want to spend his $2.00 on vending machine junk or save for another week and buy the action figure he really wants? Allow your child to make his own decisions with the understanding that when it's gone, it's gone.