Are money issues really the concerns of adults alone in this modern day?

This position has become a controversial issue in recent time. but from researches carried out in financial management, the old idea that issues relating to money should be exclusive concerns of adults is fast giving way to a new thinking, especially in these days when teenage millionaires are emerging through various disciplines and schemes.

”Children of today will grow up to become either financial derelicts or astute money managers of tomorrow, depending on the kind of training they have in money management,” according to Liz Pulliam Weston of Bankrate.com. From her theory, two classes of financial derelicts have, over time, emerged from the generation of kids improperly brought up in money management and appreciation. in the first class are the children, whose parents believed that it was their lot to suffer and travail. The second class are children of the super-rich, but whose concern was to provide for the kids, without the children suffering at all. in most cases, both classes often end up raising children with the pretty unrealistic idea that money is only to be spent. of course, this scenario is often a derivative of parents‘ belief that the ‘little darlings‘ should be denied nothing, since they have suffered for them.

However, recent money management understanding and postulations by finance experts have shown that it is never too early to teach children about money. This, perhaps, derives from the contemporary realisation that children can actually make money as early as possible, and not just a lot of spenders. To correct the mistakes of the past, experts believe that there is no better time to teach our children about how to appreciate money and savings culture than when they are still tender and young.

According to personal finance experts, certain steps should necessarily be taken by parents to produce money conscious youths.

According to Ken Dolans of about.com, it is good to influence children‘s spending and saving habits quite early in life. in doing this, he says the first principle is living by example, and not only by precept. Parents can do all the lecturing for a child on thrift and responsibility, but children generally learn money skills strictly by the example their parents set for them, he adds.

If you have been overspending as a parent, it is time for some soul-searching. For instance, giving in to children‘s unnecessary demands has a way of sending a wrong signal about savings culture. He, therefore, warns that parents should not succumb to every demand by kids.

Dolan warns that even if you are able to give your kids the moon, it is important that they learn money skills themselves. ”The only way to train up children in responsible money management skill is to give them realistic amounts of their own money to handle. that usually comes in the form of a weekly allowance,” he says.

But beyond this, other experts believe that the art of training up a child to inculcate savings and money management strategies go beyond a straight-jacket theoretical framework. According to them, segmentation according to age grades would produce better results.

Following Dolan‘s skills acquisition strategy, Tolu Abifarin‘s ”Investment Scheme for Children” explains that in a nutshell, there are some tips for teaching money smarts at each stage of children‘s development.

According to him, for children aged between four and five, it is necessary for parents to start giving them pocket change. ”Let them spend their own money on gum or candy, but explain to them that less expensive sweet (for example, Tom Tom), they would get back some change that they might save for another time,” Abifarin says.

But the expert believes that for children aged between six and eight, parents should create an allowance, through which they may begin to teach the concepts of savings, budgeting and spending skills.

At age eight, he says it is in order to buy him or her one share (or maximum of 10 shares) of the stock of a highly visible company, such as a beverage company or any other company known by children and adults for its brands.

”You can then show your child how to follow the stock online or in the newspaper. besides, the child gets to see how the forces of supply and demand can boost share prices,” Abifarin says.

Weston‘s theory of ‘Teach the kids about advertising‘ targets children aged between nine and 10. She advises parents to teach them about marketing ploys and pricing premiums. ”Tell them that if you get one ”free” when you buy one extra, it isn‘t necessarily the best deal. Talk to them about paying bills for the house. let them spend time with you while you are writing out the cheques or paying the bills online. Reinforce the notion that the bills must be paid on time and there is a penalty involved if you are late”, she says.

Weston, while describing this stage as one of the most crucial, says it is much important for parents to learn to say ”No” to children‘s demands. because James has a new expensive pair of shoe, it does not mean your Janet has a right to it.

Children should be encouraged to set up their own savings accounts with the money they are given by relatives. They can start with a “home bank” (a plastic box with a tiny opening).

Besides, the experts say, childhood days are a good time to explain to the children how interest works, by showing them the bank statement of account.

”One good lesson to teach is that ”interest” is your friend. if they want the latest, greatest pair of sneakers, and they are more than you wanted to spend, then give them the amount you were prepared to spend, put it in the savings account and let them earn enough interest until they can afford the shoes!” Weston says.

At ages 12 and 13, Dolan believes it is the right time to teach children about ”risk and reward,”-a good time to talk more about the stock market.

His strategy: ”Pick a stock in a company they like. Tell them that by owning shares of stock, they own some portion of the company. Track the stock with them and let them know its ups and downs.”

For children between ages 14 and 15, his advice is simple: ”A good time for getting a part-time job, which brings new responsibility and additional income.”