Issue 15

Teaching Children Money Skills

Susan Taylor, Consumer and Family Economics Educator

Using money wisely is a basic life skill that you should teach your grandchildren at an early age. Even if you have little money in your home, look for ways to involve the children in deciding how to spend it. Help your children understand how money is used to pay for goods and services.

Communication is the key. If they are old enough to understand, have a family meeting and talk about your expenses and your income. Ask for their help in deciding how the money is spent.

For all these reasons, don't neglect teaching your grandchildren about money. They will gain important values and skills, which they will need as they grow older.

If possible, consider giving the children an allowance. With an allowance, grandchildren can learn to make spending and saving decisions. To determine an allowance for your grandchildren, follow these guidelines:

Give an allowance as soon as the children are old enough to realize how money is used to pay for things people need or want.
Decide which purchases the allowance should cover. Misunderstandings often occur when you don't talk things out.
Make regular saving a part of the allowance.
Encourage the grandchildren to give to charity.
Review each child's allowance yearly. As children grow older, you may need to increase the amount. It's a good plan to have children account for their monthly allowance.
Teach children to use credit wisely. Credit will likely be part of their future.