5 Ways To Help Your Child Understand The Value Of A Dollar

Many schools forgo teaching children some of the most valuable life lessons they need to learn, including the value of a dollar. Other than using money as a math problem example, most kids don’t learn the basics of finance while they’re going to school. They don’t know how to balance a checkbook, what a credit card is and how it affects your credit score, or even how to build a good credit score. The fact many kids don’t learn these lessons growing up means they also fail to learn the value of a dollar. As a parent, it’s your job to ensure your kids learn the financial tools they need to grow up and financially savvy. These simple tips can help your children learn to manage money as well as understand the importance of a dollar.

Three Jars. Savings, Spending, Sharing

If you want your children to learn the value of a dollar, give them three jars and name them savings, spending, and sharing. These jars represent the real world, and it helps them to learn the importance of each one right now. Each time your child earns money, have them contribute to each jar. The savings jar should take up half their income to help mimic the real world. Thus, if your child earned ten dollars, they should be required to save five dollars. Your child should contribute a portion of the remaining five dollars to their sharing jar. Teaching your kids to donate their money to a church or their favorite charities is always wise. Most individuals suggest donating ten percent of their income, so your child should put away one dollar. The rest can go to the spending jar. You can personalize the amounts, of course, but this is a generic idea to help you get started.

Continue reading to learn about giving commission rather than allowance.