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Without a doubt, one of the most useful tools a parent can teach their children has to do with managing money. In addition to genes, children often inherit attitudes about money from their parents. Guiding them about how to earn, save and spend money are skills that children will use throughout their lives.

In the early years, starting when kids begin school and continuing until they are employees themselves, it’s good to start with an allowance. There’s much debate about whether or not to tie an allowance to chores. Whether the parent decides to do this or not, the important thing is to make it regular and predictable. The parent can determine with their child ahead of time how much money will be saved and how much will be spent.

Once the allowance is in the child’s hands, whatever they have available to spend should be left to the child’s discretion to use. Children learn how to spend and save by spending and saving. If the parent dictates what the child can spend their money on, then the child doesn’t feel like the money belongs to him. Therefore, outside of items which might be dangerous, parents should step back. If a child blows it all and has nothing left, don’t give him more before the next allowance. He’ll learn important lessons about money and about saving for more expensive items to purchase.

Setting up a savings account at a bank not only will teach a child about saving, but about the principle of interest. Tucking away money in a shoe will stay the same amount, but putting it in an interest-bearing account will make it grow. Over years, people have built fortunes this way.

A money idea at birthday time is to encourage gifts from relatives in the form of stock. Giving a child a few shares of stock in a company that they are familiar with shows them early-on about the ways the stock market operates and can be much more long-term in enjoyment than a toy that’s soon forgotten.

Involving children in the household budget in degrees can teach them about the costs to running it and why there’s not always money available for everything they want to have or eat. Discussing this in doses as they can understand is recommended and need not be more involved than just showing them a few bills as you are writing the checks to pay them.

When a child is nearing the age of ten, it’s a good idea to let them pay for gifts they give at holidays and birthdays. Of course this means that they must save some of what they have earlier to have funds with which to work. Reminders help.

Have your child open a checking account when he begins to earn money. Instruction on how to write checks and balance accounts is fairly straightforward. Get the child in the habit early on and if they bounce a check, it’s a sound lesson in money management.

Encourage children to make money. As some say, the sooner they start earning, the sooner they start learning. The traditional lemonade stand is not the only means for a child to earn money, though many still do. Watching pets when neighbors go out of town and babysitting are still popular. Money-making ideas for kids are only limited to imagination. There are several books available on money management and money-making opportunities for children. Assist as necessary. Not only will children learn about making money and costs involved but also will develop sales and customer service skills.

Finally, as with many other facets of child development, children learn a great deal from observing their parents. Your attitudes about money will affect in some ways their attitudes about money. But this is only a part. Nature shares a role here as well. How else would two children from the same family have widely divergent saving and spending patterns?

Money is an inevitable component that will be in a child’s life. Involving them as early as they can distinguish concepts is the time to begin. The more they understand the quicker they will realize that money doesn’t grow on trees but it is attainable with work and persistence. And through sound management they will have something there on a rainy day.