6 Things Kids Need to Know About Spending Money

It's important for kids to be crystal-clear on whether something is a need or a want. Vladeep/Shutterstock

What grade would you give your parents for how well they prepared you to manage your finances? What grade will your kids give you someday?

There are six basic financial principles your kids need to know before they leave the safety net of home.

No. 1: How You Spend Affects Your Future

Kids need to know that if they spend their money without thinking about their choices, they will probably make bad decisions. Teach them how to stop and think before making any spending decision.

No. 2: Create Goals for How You Will Spend Your Money

A goal is like a roadmap. It shows where you are and where you want to go. When setting goals, think short term, medium term, and long term. Short-term goals might have something to do with tomorrow. Medium-term could be months or even a year away. Long-term goals are far away.