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Jerome and Juley Haynes started teaching their children Jeron, 9, and Jaylen, 3, about money at 3 years of age.  Both children have a savings account. Jeron has $650 and Jalen has $200. Jeron is paid based on a point system that includes grades, chores, and behavior. His parents require that he tithes, saves and keeps a small amount to spend.

“Honestly, we talk to our children about money just about every day,” says his mom.  “Jeron has a notebook to keep track of his allowance, tithes, savings and what he spends.  We taught Jalen how to recognize quarters, dimes and pennies and he places them in his piggy bang. We want our kids to be ahead of the game.  No one taught us about finances when we were young.”

Sheryl Ridley Dorsey, CPA, MA and owner of Ridley Dorsey CPA firm, affirms Juley Haynes’ statements. Parents don’t discuss money with their children because of their own lack of knowledge.

“You can’t teach something you never learned yourself,” says Ridley Dorsey. “Children tend to model their parents behavior. Parents should begin talking to their children about money when they begin learning how to count.”

Children should learn the basics of money management at different stages in their lives.  From ages 4 to 9, they should be building any savings accounts and have short-term goals.  From ages 11 to 13, they can be introduced to CDs and money markets and should be taught about interest. From age 15 and beyond, teens can be introduced to bonds, stocks and mutual funds. Parents can explain how they can own a piece of the company that they are wearing (such as sneakers) and eating and drinking (snacks and beverages).

“An allowance is an effective learning tool to help children learn how to budget their money, save for short-term goals and purchase items on their “want” list,” says Ridley Dorsey. “Also, family meetings are important. Children should know they can’t always get the latest game or wear the latest trend due to family financial constraints.”

For more information, read the following books: Money Management for TEEN$, TEEN Girlz and Their Monie$, Rich Dad, Poor Dad, and The Motley Fool Investment Guide for TEENS.

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