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Money Matters for Minors

As a parent, one of the most important skills you can teach your children is good money management. Educating a child from an early age — and consistently reinforcing these financial lessons throughout their formative years — establishes sensible money habits that will stay with them for life. Talk openly with your kids about money, communicate your experiences, encourage them to ask questions, be prepared to answer them and always practice what you preach. Start your children off on the right foot financially with these tips on teaching them to be savvy about earning, budgeting, saving and spending. Pocket Money Teach your child that money must be earned - it doesn't magically emerge from ATMs. Set age-appropriate tasks — like helping with the washing up — that must be carried out to earn an allowance. Set up a chore chart and pay them a small amount for each job completed. Goals Effective financial planning begins with a vision of what you want and when you want it. Help your child set both short- and long-term savings objectives. Creating a wish list helps them distinguish between “needs” and “wants”, as well as learn to prioritise. Budget Show your child how to budget and help them establish a basic one of their own. Give their pocket money as a combination of notes and coins; this teaches how to handle different sums of money. Show your child how to read household bills and bank statements. Savings Account Open a savings account in your child’s name. Explain the concept of interest and go over their bank statements with them. Even though most banking is done online these days, take your child to a branch so they see where their money is going – this way, they’ll feel responsible for it. Piggy Bank While opening a savings account is important, a good old-fashioned piggy bank is a fantastic way to help your child reach their goals. Encourage them to put loose change in a clear 'savings jar' each day so they can actually see it grow. Employment Encourage your teenage child to get a part-time job at the local supermarket, fast food restaurant or department store. Having an independent source of income will give them a greater sense of achievement and responsibility. Spending Considering younger children are more likely to afford quantity rather than quality, let them spend their short-term savings at a local two-dollar shop or garage sale every few weeks. This way they gain a sense of how much a certain amount of money will buy.