There are so many things we have to teach our children but one that is often overlooked in today’s world is teaching kids about money. Unless your child has a large trust fund in their name or some other financial windfall heading there way they will need to learn about personal finance. The earlier you start teaching children about financial matters the better. During the most impressionable years of their lives, young people will formulate an opinion about money that will likely stick with them throughout adulthood. With that being said, it’s important to be straightforward with kids. They need to know the value of a dollar and you’re their best teacher.
Use everyday activities to teach lessons about money.
Take your children to the grocery store. Teach them how to find the best deals by watching for sales, comparing prices, and using coupons. Purchase a small calculator for your child and work on adding and subtracting while you shop. This is especially helpful for elementary aged children who are learning to differentiate between a dollar bill and a hundred dollar bill.
Have them earn their allowance.
State your expectations clearly. Give your children chores that they must complete satisfactorily in exchange for their allowance. Gently remind them to use their money wisely. Mention how many bags of garbage they took out or dishes they washed to earn their allowance. This will put potential purchases into perspective for them. Even if they do end up spending all their money and complain about being broke, it is better for them to learn from their money problems earlier in life then they have to take care of themselves.
Use online resources to make financial matters fun.
There are plenty of websites, games, and applications that teach children about money in a fun but educational way. A few of the most popular include: thebirdy.com, Thegreatpiggybankadventure, Feedthepig.org, kids.gov.
Get your pre-teen or teenager a prepaid debit card.
Choose a card with limited fees and set up email alerts to track funds. Have your teen carefully monitor their balance and add money from their savings account whenever they need to make a purchase. This will give them the opportunity to plan ahead and account for every penny that they spend.
Schedule regular meetings with your children to discuss financial matters.
Speak to them about the rising cost of living. Talk to them candidly about credit card debt and how detrimental it can be to their credit score and financial future. Take time to explain to them the importance of higher education and the different types of aid that is available. Encourage them to look for scholarships early on. Many are awarded to children long before their senior year of high school. Rack up as many of these as possible and your child can attend college for free.
The best way to teach kids about money is to start now. Having a healthy relationship with your finances is something to be desired in today’s world. With so many people in debt and struggling to live, it’s essential to start educating your children while they’re young. They’ll grow up knowing how to determine a want from a need, how to prepare for emergencies, and how to get the best deal on the things they purchase all because you took the time to educate them about their finances.
Charissa is into frugal living and saving money.
Great tips! I was thinking not to give them debit cards (or any card for that matter), but you do bring up a good point about how it can teach them to plan ahead.
I think that number 2 and number 5 are very important.
When we are teens, we really don't have a clue what credit score is or how it affects us directly. When we aren't educated at home from a fairly early age, and we then leave home, we can make a lot of stupid mistakes which we have to pay for again later in life. I've witnessed this several times from people I knew.
One thing that I have noticed personally among families of traditional Jewish and Chinese heritages (who also tend to have a bit of money more than other ethnicities in my travels) is that money is a subject taught among themselves from an early age.
We have to learn the value of money as young as we can.
When I thought about it recently, I realised that my problematic relationship with money started in early childhood; first money didn't play on a larg(ish) farm and then my parents were never short (or I didn't know whether they are). It took a lot of doing to change this and start undertanding money. This is why, my son has been involved in the financial decision of the family and knew from very early the connection between 'mummy selling labour', the money coming out of a hole in the wall and icecream.
Charissa this is a topic I have written on many times. As parents, we must prepare our children for the adult financial world. Unfortunately, many parents want to hide their bad habits and past mistakes from their children. Those mistakes could be the best learning tools for a child.
I remember when I went to the bank with my mum for the first time at 12 to open my own account I felt so important haha! It was great because there was no overdraft so you learn to spend everything on debit.
We are using all of these tips, and I am confident that when said and done, we will have well-equipped our kids to manage money wisely. No parent can force their child to behave fiscally responsibly as an adult, but knowing that you've taught them the right way to spend, save and earn is a great boost to their future. Thanks for the great post!
We didn't have meetings as a family when we were young but we did learn a lot about money because my parents were open about it. We had to save up for the things we wanted, and if we wanted something we couldn't afford my mom would tell us it's not in the budget.