Teaching Kids – The Basics

Teaching young children, the importance of managing money responsibly can help them live fuller and well-balanced lives as adults, using all six senses to maximum efficiency.

The Five Bs of Effective Money Management

1. Budget

Let your child outline his or her needs in a typical month and plan a budget around these costs. Provide for recreation and reading as well, you don’t want Jack or Jill to be dull children!

2. Balance Sheet

Print out a simple balance sheet template and teach them how to enter their debit and credit every day. At the end of the month they will know exactly where they stand, thus imbibing a sense of fiscal responsibility.

They will understand that there is no such thing as a free lunch! And that a dollar saved is a dollar earned.

3. Board Meeting

Discuss and communicate with those associated with your income and expenditure. If your children need additional money all the time and cannot manage within their pocket allowance, you can help them prioritize their spending.

4. Bills

Teach young Jack or Jill to collect every bill, receipt and piece of paper related to his pocket money income and spending. That will also help them prepare their balance sheet easily.

5. Banking

Open a junior account in their name and let them operate it. Accompany them to the bank and let them understand the various aspects of banking and money management. You might just have a successful Wall Street professional in the making. They should be ready to roll by the time this recession is out!

In the course of your money management discussions over breakfast, they may also ask you about another B – “Dad, what’s a bailout?!!” If you teach them sound financial ethics when they are young, their company won’t ever need a bailout for sure, when they have one!

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