DETROIT – With so many parents spending more time at home with their children, now may be the perfect time to give them valuable lessons on money, budgeting and spending.
“I really think this whole adage about more is caught than taught is really true when it comes to educating kids about money,” said Ted Rossman of bankrate.com.
Rossman said parents should start small.
“Giving them a few bucks a week for an allowance could be a good way to teach them about saving, investing, and giving charity,” Rossman said.
Local 4 Business editor Rod Meloni is a certified financial planner and recommends that allowances be earned.
“When it comes to the relationship the child has with money, it ought to be attached to some sort of achievement so they learn they have to work for a living,” Meloni said.
A good way to teach children about money is by getting them to divide money they receive into three parts: Money they should save, money they can spend and money they should give -- and teach those values early.
Experts say it is important younger children handle cash. Consider letting them pay for something at the store and understand how money works.
Community Financial Credit Union offers student programs and has resources for students and teaching tools for parents by clicking here.
Have your middle school student be responsible for more of their costs, for example, going out with friends or some of their clothing.
You can also consider a debit card for your high school student, teaching them how to use “plastic” but without spending more money than they’ve earned.
One option is Greenlight, a debit card for kids that parents manage from their phones
“It has built in spending account with debit card, it has a built in savings account with savings goals and kids can visually see how close they are getting to their goal. It has parent paid interest to incentivize the kids to save,” said Tim Sheehan, the CEO and Co-Founder of Greenlight.
Meloni also recommends teaching children about banking and investing.
“One of the things a child needs to understand is money does grow, just not on trees. In other words you need to put your money in a place where it can get compounded interest and there is money being put on top of money. Overtime that money can grow,” Meloni said.
For more Money Matters advice for your children or yourself, check out Meloni’s special reports by clicking here.