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Basic money management tips parents can teach their kids

Financial lessons should go beyond the classroom.

In order for people to be able to send money home to their families, they have to practice good spending and money management habits so that they can effectively balance saving, spending and providing for their family. But as a recent survey suggests, parents often fail to teach these lessons to their children.

According to a survey performed by BMO Harris Bank, nearly 90 percent of parents believe it's important to talk to their kids about how to effectively handle money. Yet despite this, only 33 percent actually take the time to do this on a weekly basis.

While this may prove difficult for immigrants who are separated from their families, educators say parents should strive to teach their kids as best they can.

"Learning doesn't stop when the school bell rings at the end of the day," said Kara Kaiser, money management expert and  regional president for BMO Harris Bank. "It's never too early to introduce kids to the world of finance."

She added that even young children can learn basic money skills, which will last them for all of their lives if parents are consistent with teaching.

How in depth these lessons should be largely depends on their age. With this in mind, Kaiser offers a few suggestions.

For instance, if parents have children who are between the ages of 5 and 9, the bare essentials of money management should be taught. For instance, explaining why it's important to save, what the purpose of a bank account, what goals are and why they're important, are all small lessons that they should be able to understand.

By the time they approach their early teen years – or as many people like to call it, the "tween" years – more details can be brought into play. For example, if parents have found themselves investing in the stock market, they may want to talk about what the stock market is and how safe investing can help them increase their earnings. Kaiser says parents may also want to help their kids interpret the various letters and symbols that explain how the stock market performed the previous day and whether the shares they invested in made any dividend gains.

Depending on how involved and interested kids become in money management, they may want to make it a career path or as a hobby. Once kids reach their late teen years, they may want to go to college. There are a variety of majors that involving finances and teachers should be able to help them understand some of the inner workings of the industry and how they can earn a living.

 

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