My daughter received some money as a gift. It was a substantial amount for her ($60), and she was anxious to spend it. Her brothers eagerly helped her come up with ideas for how to use that money. Candy, toys, clothes, movies, going to a fun center…the ideas kept coming. I noticed none of the ideas was to save it, invest it, or even wait to see if something comes up that she might want.
Nope. Spend it. Spend it. Spend it.
I want to help my kids learn better money sense. No one is born GOOD with money. And no one is born BAD with money. No one has an inherent skill for handling money. It is a learned skill. And as a parent, it is a skill I have to teach. If I don’t want my kids living off credit, or getting in over their heads too young, or spending every penny they make/get as soon as they have it in hand, I am the one that has to teach them how to manage their money. If I want my kids to save money, and invest, guess what?…You got it!!!! I have to teach them.
Here are some of my ideas for how to teach kids about money. I have started doing some of these things, and will let you know how it goes:
1- Through Example.
As parents, we touch every area of our children’s lives, so why not offer them some financial wisdom? How are we holding ourselves accountable for teachings our kids about money? What example are you setting?
Ask yourself these questions:
- Do you spend less than you make?
- What is your philosophy on debt? Using credit?
- Do your kids see you wanting to have what others have, or being content with what you have?
- Are you too good for used, hand me down, repaired, refurbished?
- Do you show your kids to work for your money, or do you expect something for nothing?
I suggest including your children in your budgeting, and helping them see how your hard earned money is spent in your family. They will better understand when you say “no” to things, and it will fuel their own more intentional use of money.
2. Through Books.
Read books that talk about money and show uses, budgeting, finances, and other money lessons. My kids love reading time, and so why not use that time to help kids learn some money sense? Kids often learn better in story format, and will enjoy reading about other kids who are learning to use money. Here are a few of my favorite suggestions, and books I have collected to help teach my kids about using money:
1. The Coin Counting Book
3. Through practice.
Kids learn best through application. If you want them to learn to be good with money when they are older, let them practice now while their credit and basic necessities aren’t at risk. You can do this through an allowance, by helping them earn money at home with chores, etc., through an actual job, or any way you think is wise. Give them a chance to make mistakes, and take advantage of teaching opportunities. Remember to teach them to WORK for what they want. To Save. To Invest. To Give.
I totally suggest helping them create a budget. Kids can start learning about money as soon as they can count and understand the concept of larger and smaller. Helping them to manage their pennies will give them the skills to manage their dollars.
4. Through play.
Set up a store, let them play “community”, get a Pretend and Play Calculator Cash Register or Toy Mini Market Cash Register. The more kids play with money, use it, and familiarize themselves with it, the more comfortable they will be with it when they really use it. Join in that play. Or set up a mini economic system in your home where they can earn “money” and redeem it for things.
5. Through conversation.
Talk to your kids about money. Don’t make money secretive or mysterious. But also don’t make it the focus of your life. Talk about the bills you pay, the money you earn, the way you budget, the way you spend. Explain to them what investing is, what credit is, what the big money mistakes and traps can be. Help them to feel confident asking you questions about money. Just remember, make it age-appropriate, and don’t overwhelm, rather teach a little at a time.
I’m still new to this, and would love your input, so join the conversation! Tell us how you teach your kids about money in the comments below, or on Facebook. We love to hear from you!