How To Teach A Kid About Money

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I think smart money management is one of the most valuable things you can teach anyone, period. Why? Well, I’m of the opinion that dysfunctional spending leads to a lot of problems in peoples’ lives that they otherwise would have avoided. And sure, people can be retaught when they’re older, but I wish that early education in public schools would seriously focus a lot of time and energy on some of the following, because I think it would help empower more people than any of us could ever imagine. That and free health care for children are two of the most important things to make sure we continue our success as a strong, intelligent nation.

Alright, so from the beancounterblog comes number 3 on the list of 10:

3. Difference Between Needs and Wants: small children – as well as many adults – have a tough time distinguishing between needs and wants. Admittedly, sometimes the line is blurry. I might need a new computer in order to check email faster, make better Excel spreadsheets, and post my last-minute bid on eBay faster – but I have a sneaking suspicion that my need is more of a want. So if it’s tough for you and me to decide what is a need and what is a want, how do you teach your child this important principle? There are a few ideas that I’ve come up with. First, teach your child how to “sleep on it.â€Â? If your child really, really wants that Polly Pocket Toy Cell Phone then have her wait a few days to see if she still wants it. Some of the worst financial decisions are made on the spur of the moment. Second, teach your child how to say “noâ€Â?. By reinforcing that some things are just too expensive or take time to save up for you child will begin to learn that great things come to those who wait. This principle will not only come in handy when telemarketers call but will also help them develop independence and self-discipline. This principle will also help in saying “noâ€Â? to other things such as drugs and alcohol.

Seriously, the whole list is great, and if you have kids I highly recommend reading it. Hell, if you have ANY significant debt I highly recommend it, because chances are you’re slightly dysfunctional with money and need a helping hand to get back on the right track.

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