canstockphoto9190651Teaching your children  money management skills and learning to appreciate what they have should be learned through example and life experiences on a daily basis. There are other ways they can learn how to handle finances besides putting away money in their piggy bank .Here are some simple ways to teach kids about money.

What is a good age to start teaching your children about managing money? They should start understanding the true value of a dollar when they are around seven years old. Real-life examples will help your children to understand why certain things have higher monetary value than others. They should also be taught the difference between wants and needs.

Taking your children on a trip to the supermarket is good way to teach your kids the value of money. You can start by showing them the price of apples by the pound. Compare the price of apples that’s sold by the bag to the ones that’s sold individually to find the cheapest price. You can also use other items such as fresh and frozen vegetables as well as laundry detergent.

You should explain to your children how much work goes into growing fruits and vegetables and making laundy detergent. The farmers and laborers often work long hours to grow the food that’s on our dinner plates and the household items we use on a daily basis. Once you have this conversation on what it takes to produce different products, they will learn to appreciate the value of different items in the marketplace.

Teaching your kids about money is not only limited to physical products. You should also explain to them about different services. Let’s use the family dentist for example. Explain  all of the services that the dentist provides and then let them know the price.

Compare the price of the hourly rate that the dentist charge to the amount of the cleaning service that clean your home for five hours. Let’s say you have to pay $200 for both services. Even though they are paid the same amount of money,  the individual that’s providing cleaning services in your home will have to work five times as long to earn the same amount of money as the dentist.

The example of the service will not only teach your kids about the value of money, but also the value of education. They will learn that the marketplace put more value on skills that require higher education and accreditation.

Your children should also be taught about major purchases and why people will sometimes have to pay for certain things over an extended period. The monthly mortgage on your home is a good example. This is a good opportunity to talk to them about the importance of managing their finances and maintaing good credit. Just as your children save their weekly or monthly allowance to pay for certain items, you can show them how you save money to pay cash for certain things such as their school clothing and flat screen TV rather than running up your credit cards. This will avoid you having to pay a high interest rate. Of course you’ll want to tell them that purchasing items using credit is sometimes neccessary, especially when it comes to buying a home.

Spending time together on shopping trips, comparing prices of the products and services that we use on a daily basis and having conversations on maintaing good credit are simple ways to teach kids about money. Be careful not to overburden your little ones with these life lessons, but explain how you make  decisions on purchasing certain items around your home. This will teach your children to be smart with their money in the long run.

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