Page 79 - Book2E

Investments . Help children learn about the ups and downs of the stock market early in life. Then they will most likely be more comfortable with investing when they are adults. Give gifts of stock in companies your children are familiar with to encourage them to follow the stock market.
Tax returns . Taxes are a significant expense that few children consider. Have your child sign his or her tax return. If your child is employed, look at his or her pay-stub together and discuss how taxes work and why they are necessary.
Allow children to fail . Whether your chil-
dren make wise or poor spending choices,
they will learn from them. Encourage them
to think through their spending options
and use common sense when purchasing
something. This encompasses doing some
research beforehand, being patient for the
right time to buy, and using what’s known
as the “spending-by-choice” technique. Help them determine at least three other things the money could be spent on by setting the money aside for one of those items, and then making a choice of which item to purchase.
Keep talking to children about family finances . Consider talking to your children about money when they reach age three. Use a piggy bank to teach them how to identify and count coins and cash. Between ages four and five, explain the importance of good savings habits. Help them understand that saving for a specific item and then buying it gives great satisfaction.
As your children grow, keep communicating with them about your values concerning money—how to save it, how to make it grow, and most importantly, how to spend it wisely. Help them come to under- stand the differences between needs, wants, and wishes. This will prepare them for making good spending decisions in the future.
Teaching Children About Money 71
If you want children to keep their feet on the ground, put some responsibility on their shoulders.
—Abigail Van Buren