September 1st, 2010 
Tushar Mathur How to manage money is a valuable lesson that not enough parents impart to their children. We’ve all seen spoiled kids that have turned into spendthrift adults in debt.
It doesn’t have to happen to your child – teaching kids about money isn’t that complicated. Here are some great ways to show your child how to manage money.
The Weekly Allowance
In order to learn how to manage money, a child actually needs to have money to work with. Consider giving your child a weekly allowance.
Some parents give their kids an allowance without requiring anything from them, but if you like, you can have your kids do chores around the house in exchange for this money.
Short Term Pain, Long Term Gratification
It’s never too early to teach children how to save money instead of squandering it on throwaway purchases. If your son wants to buy something that is out of his budget, you can explain to him that the only way he will be able to afford it is if he stops spending money and saves instead.
Make a chart tracking the amount of money saved so the kid can actually see the results of delaying his short term gratification.
Budget Like a Pro
If you teach your kids how to budget early on in life, when they get older they’ll be pros at it.
A simple way to teach budgeting is to require your child to split up her allowance money. For example, if you give your daughter ten dollars a week in allowance money, you can require her to set aside two dollars for charity and two dollars for savings. She is then allowed to spend the remaining six dollars however she likes.
Will Work for Cash
Getting your child a job is a great way for them to appreciate the value of money. Younger children can rake up the neighbor’s leaves or have a lemonade stand, while older children can wash cars, babysit and shovel snow.
After experiencing a week’s worth of hard work, your child may have a different perspective on money.
Instead of regarding parents as walking ATMs, a working child can begin to understand where all the money comes from. Before starting to work, your kid may not have understood why you couldn’t buy them those expensive designer sneakers.
After having a job, hopefully they’ll understand enough to start saving up themselves.
Immersing your children in discussions about financial matters will help them understand the world of money as they grow into adulthood.
This is a guest post by Christine Vaughan from the website LifeCover.ca, which provides life insurance in Canada. Christine lives in Vancouver, BC.
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