How should you be teaching your child about money? Teach your child about money when they're young, have them save coins in a piggy bank. When they're older, help them buy stock in a company they like.
Say you have a six-year-old daughter. You want to provide her an allowance every week. Let your son or daughter do something to receive that money and then maybe create different types of banks. Maybe your child likes Sponge Bob, so you can create a fund for Sponge Bob toys, for example. Create a bank for savings and give your child coins to work with -- four quarters every week, let's say. Then you say, "Okay, this is what this money means. Now, some of this money you want to spend today goes in this bank. Some of this money you may want to save and these are the benefits of saving." Let the child touch the money and put it in each bank so she's segregating it out. That is a really good way for children to learn that a bank builds up and she hears that change go into it. Then you want to turn it into dollars and explain the benefit of maybe not buying everything now. But it is a process you cannot drop. You have to be consistent. You have to continue teaching money management with your child going forward. Then when you have a teenager, maybe your teenager loves McDonald's or Hot Topic or another publicly traded company. You can help them buy some shares of that company, so they feel attached to it. It helps them understand that when they buy a product from a company that they own stock in, they are helping themselves too, because they have ownership in that company. So, sometime down the road, they will learn to link personally to some gratification of ownership in a company.
There are also games at some toy stores on how to change money. Some Discovery Toy Centers have really good games that teach children how to manage and spend money. Kids learn how to take a dollar and change it into quarters, dimes, nickels, and pennies. That really is a process you need to continue on a weekly or a monthly basis so that your child is not afraid to handle money and they can understand how important it is to do so.
