4.Money

1. When do children begin to comprehend the value of money?

It seems to me that kids can generally recognize money as money at the age of two. At the age of three, kids can handle and understand basic money concepts. This is the age when most parents introduce their children to cash and currency. Kids are given money to handle, spend and save. Thus, they begin to understand what money is for. When kids reach school age, they begin to comprehend (according to psychologists) more of the true value of money 'cause it is by the age of ten that kids stop believing money is infinite, that it must be earned, and it is important to save. For example, kids can recognize the difference between something that costs 1 dollar and another item that costs 100 dollars. They start to have money of their own, and they start to make decisions about using it.

2. Should parents reward children with money?

You know, there has always been much debate about using money as a reward for kids. On the one hand, it's an efficient method of reinforcing good behaviour. But it works well only if parents are targeting a problem, not just handing out money throughout the day as children brush teeth, get dressed, or do homework. When it's done right, it helps to target a problem behavior in order to shape a new behavior, and it helps children learn that money is earned. What's more, I'm positive that kids need to have money of their own so they can learn how to make decisions about using it. But there should always be some chores the kids have to do without pay because they're expected to help out as part of a family. However, it's undeniable that external reward does not build internal motivation. And a lot of evidence shows that monetary rewards work in the short term, but the benefits don't last.

3. Why do people rarely use cash now?

To my mind, there are several reasons why this happens. First of all, these days people buy more and more products on the Internet which is a cash-free zone. Secondly, carrying banknotes and coins can be a source of insecurity due to the risk of loss or theft while credit and debit cards are much more secure as they can be canceled soon after they are lost or stolen. One more reason why people opt for using cards instead of cash is because they don't want to miss out on card rewards such as cash back, reward points or extended warranties. Well, and also because it's much more convenient to carry cards and pay with them as in case with using cards there is no need to carry a wallet with you or spend time digging around in the purse or pockets for exact change.

4. Is it good and necessary to teach children to save money?

Absolutely. First of all, it's one of the key lessons that will impact whether kids will do well in life 'cause saving teaches discipline and delayed gratification as well as goal-setting and planning. It builds security and independence. For example, kids will learn to live within a budget. And they will learn how to balance spending money on what they want now with saving for the future. Plus, having an emergency fund set aside to cover unexpected expenses will make kids' life less stressed. Another reason why it's essential to teach children to save money is that most children form core behaviors, which they will take into adulthood, by the time they are 7 years old.

_____________________________________________