Your kids are probably getting great grades in school and can teach you all about the latest technology. But have you ever questioned where they’re learning about money matters? Typically, handling finances in life isn’t a subject that’s covered in school. By demonstrating good money management and teaching the value of a dollar, your kids can grow up to be adults with healthy money management skills.
Why is it important to teach kids about money?
The idea of “needs versus wants” is an important lesson for kids to learn early in life. Your kids won’t just wake up as adults one day with the ability to exhibit good money management skills, so it’s important to start teaching them about finances from an early age.
How can you effectively teach kids about money?
Teaching kids about money is a little like SHOW and TELL.
• Demonstrate good money management yourself. Kids learn more by what you do than by what you say. Exhibiting good judgment as it pertains to financial decisions is key.
• Explain why you’re making a certain decision about money. In order to process how to make sound financial decisions, children need to understand the reasoning behind a decision.
• Put it on paper. A worksheet for kids that incorporates categories for earning, spending, and saving is a great way to teach kids about finances.
• Share books relating to financial matters. Reading stories together about money matters is another idea for teaching kids about money. Check out this list for ideas.
• Encourage kids to make their own money. Nothing teaches the value of a dollar to kids like earning it themself.
Ways for kids to make money:
• Help children start a small business of their own based on their interests. Kids interested in pets might start a pet sitting service; those who enjoy crafts might start making specialty accessories in school colors to sell at school events. Of course, parental involvement and supervision is recommended.
• Encourage your children to start saving extra or “found” money, like the change in the washer or in the sofa cushions, for a specific goal such as a day at the water park.
• Organize a garage sale or attend a flea market, with your kids setting up a table of their own belongings to sell.
Frugal living tips that help kids learn about money:
• Preparing meals at home versus dining out. Calculate the cost difference of the meals and share with your children.
• Include your children in small financial decisions. For an upcoming party, let kids in on the budget you’re working with. Allow them to help determine what is important and what can be sacrificed in order to stay within the budget.
• Clip coupons together. Make a game of using coupons by having children participate in food shopping, searching for items associated with coupons, presenting coupons to the cashier, and viewing the sales receipt to discover savings.
• Plant a garden together. Calculate savings from growing your own fruits and vegetables for your family to enjoy.
• Check out games and mobile applications that provide interactive ways to teach good money management skills.
By incorporating sound financial decisions in your daily life and incorporating frugal living concepts, you will be teaching the children in your life key concepts for money management.