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5 vital money lessons to teach your kids

Published On: Mar 05 2013 08:02:01 AM CST
Updated On: Feb 25 2014 09:52:13 AM CST
Counting out money

iStock / mocker_bat

Your child is a sprout that keeps growing, so why not start by planting a seed in their brain to make wiser financial choices for their future?

With today's economy in a tight crunch, it's more important than ever to start introducing your kids to the world of shiny coins and green bills. To ensure kids learn valuable lifelong financial skills, money lessons should really start around the ages of 5 or 6.

Money talk with your kids is a serious issue but can also be a fun learning process. Through games, store trips and raising money, they will take away lessons about saving, good future planning, using common sense and giving back in helping them reach their goals.

They will also teach their future children the same methods their parents did.

Give Back To Community

There's no better way to teach your kids about giving back to the community than through charitable donations. This can be done when attending your local church service or a non-profit organization your family cares about.

You can also help your kids raise money, such as having them put together a lemonade stand or by getting the community together for a charity walk.

Once the money has been raised, sit down with your kids and discuss a problem they may be concerned about in today's world. Is it the lack of education other children are receiving in other countries? Maybe it's concerning the well-being of the elderly or an endangered species?

No matter what the reason, your kids will feel better about themselves knowing that they made a difference in the world with encouragement from their parents.

Open An Account

Your children are the greatest joy that has been given to you, so why not start by saving up for them?

Open up a savings account for your kids as soon as they are born. Use money given as gifts from baby showers, holidays, birthdays, etc., and put it away for them.

You can teach them how they can put money away into their own home savings account by using a piggy bank. Once they are at an age to start earning an allowance for doing good deeds around the house, teach them to put a certain percentage away.

After they understand the concept of saving, put the money from their piggy bank into their already-established savings account. This also introduces your kids to the bank and how the institution works hard at investing their money.

Over time you can take the next step to teach them about how their money can make money by introducing them to a financial investment company. Don't you wish somebody had done the same for you when you were young?

Save, Save, Save!

Show your kids how much you spend per month on bills, food, gas and other necessities and what percentage you have left over to put away.

Financial experts say that you should put away at least 10 percent of whatever your paycheck is. Also tell them that some months may be tougher than others.

Take them shopping and show them how much groceries cost on an average trip or even how to save by buying the store brand instead of a high end brand. It's the same product and tastes great.

Another great way to show your kids how to get a bargain is by taking them to a local dollar store. There are many great items for a buck -- Kleenex, toothpaste, detergent, crackers and so on. When it comes time to check out, let them count out the money to pay the proper amount.

They will feel like a grown-up and have fun at the same time.