Teaching Children About Finances

Whether children should be exposed to finances at an early age is subjective, but finance is something we all have to face. The way I see it, knowledge is danger but so is ignorance. The more practice and understanding we all have of something, the more aware we are and the more manageable it becomes. With that said, with proper guidance teaching children about finances can be an invaluable lesson, not just about money but also about compassion, generosity, time management, prioritizing, forethought, impulses, responsibilities, and a myriad of other lessons. Create a four bank system, which can be stored in piggy banks, boxes, etc. You can even turn it into an arts & craft decorating day.

~Giving (10%) Donation fund that goes to a needy family, charity organization, etc.

~Spending (30%) A discretionary fund that can be used on whatever their impulses drive them to.

~Short-Term Savings (30%) Funding for pricier items such as a new bicycle or a stereo, things that require some financial accumulation

~Long-Term Savings (30%) Intended for future purchases such as a car, traveling, or college expenses.

Source: Frugal Living for Dummies