Teaching your child wise money habits is beneficial to their futures, as are all other values your child will learn from you. Therefore, it all begins with setting a good example. This means cooking more home made meals instead of picking up take out because it's easier. This means taking your child shopping and teaching them how to look for the good deals.

Not only should you take your child shopping with you, you should allow your child to see the monthly bills. Knowing what an electric bill, phone bill, mortage/rent payment, etc. cost is the second most effective way of teaching your teen about cost. The first most effective way is to tell them they have to start paying their share. (This will put an end to their leaving the radio on overnight, or other wasteful actions!)

The easiest way to teach your child wise money habits is to teach them the value of money. Allowances should not be given freely. For that matter, nothing is free. Everything must be earned. When your child reaches a certain age they should be buying their own clothes or anything else that they get their stubborn little hearts set on.

Rather than being an unfair parent and trying to explain to your child why they do not need a pair of jeans that cost $75, you can allow your child to buy those pair of jeans with their own money. I guarantee that for the work a child will have to do for that $75, your teen may prefer the idea of a $20 pair of jeans instead.

Set up a list of chores your teen has the option to do, including a pay rate that comes attached. $5 for doing the dishes all week. Ten dollars for washing their own laundry for a month. Though these rates may seem awfully low, so do our paychecks when we're done paying bills. The point is that you work hard and don't really get to enjoy the benefits so why paint a prettier picture for your teen?

I promise that once your teen tastes reality, either their expensive tastes will change or you won't have to lift a finger at home because your teen will be busting their butt! You and I both know how teens are, so by following this method of teaching the VALUE of money, your teens spending habits will improve.

Learn more about this author, Caryn Murray.
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