Many parents don't properly explain to their children how to manage their money, particularly because most parents don't know how to manage their own money. Use the information in this book to learn how to better manage your money, then teach your children. Explain to them how not to make the same mistakes you have made in the past. Explain the value of money and provide your children with the understanding of how to start a savings plan and not to spend all the money they earn. Do not give children money when they request it. Instead have them perform a choir to earn that money in the form of an allowance. Encourage children to get a job when they are able so they can gain experience with managing larger amounts of income. Explain the benefits and possibilities that can be achieved by saving a small portion of their money earned, be it in a savings account or an investment in stocks or bonds. Ensure children understand the benefits and dangers of using a credit card. When the child is a teenager, co-sign a credit card for their use to start building a credit history and then monitor their transactions ensuring they understand how to properly use that card. The money management skills learned at an early age will provide them with a better understanding of how to succeed as they grow and to be better prepared for life's financial challenges by taking control of money instead of money controlling them.

     A great way to start the learning process of investing is to teach your children how to invest by picking stocks of companies your child recognizes. Monitor your child's progress by organizing a practice account for your child to keep track of the companies' progress using make believe money. Read the newspaper and check the Internet together looking for announcements to understand the effect on the price of the stock. Both you and your children will learn a great deal which will greatly benefit your future financial stability.


Return to Money Management Topics.