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Why should we be positive and neutral, as opposed to negative and emotional, when it comes to speaking about money with our kids?

You want to be positive and neutral because you want your children to associate saving money with something positive so that they can carry these feelings over into their adulthood. It is important to be balanced in your outlook and explanation so that they may approach financial talks from a neutral rather than an emotional point of view.

What is the next step to teaching a child about money?

Many experts believe the next step to teaching children about money is to begin to reward them, in some small way, for chores done around the house, and encourage them to save by opening up a bank account in their name in which to make deposits. The act of encouraging saving at a young age will greatly boost their self-esteem, even if they only deposit a few dollars at a time. Each time he goes to the bank, the child begins to think positively about saving, and these feelings may last a lifetime.

How else can I teach my child about money?

It is important to teach your child the value of delaying a purchase, not impulsively buying an item just because he wants it. Show your children that you are saving every week for experiences such as vacations, or other big-ticket items such as a car. Let them see that when you are in a store, you may look at items to buy, but when you don't need it right now, you decide not to buy it. Experts say that children learn by observation. If you believe in delaying purchases and not using your credit card to buy something that you do not have cash to pay for, your children will begin to do the same.

What is another way to encourage children to save money?

As with your employer's matching program for your 401(k) retirement plan, you can also match what your child puts into his account. Some experts have suggested making this match for a long-term goal, such as the purchase of some new game or clothes. The match will allow your child to see how fast his money has grown, which will boost his self-esteem as well.

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