Having children is a great responsibility. Teaching kids about money, and encouraging them to save and be responsible and future-minded with money, is an exciting opportunity we as parents have. Not only can we be great examples as we budget, spend and save, but we can teach our children, according to their different ages, how to be wise with their money too. That they can manage their money wisely one day and have a deep understanding about how saving and managing money works.
My favorite tips for teaching kids about money values and saving:
Have Spend & Save Jars
Give your child a Spend Jar, which he can use to spend on whatever he wants to. As you shop, show and explain the prices of each item he wants to buy, and see if he has enough. Also explain that if he doesn’t buy the item today, he can put that money in his Save Jar (he can even make his own). Then he can buy something he REALLY wants, which may be bigger, later on. Teach him that delayed gratification can pay off later on in greater ways – he will get a bigger or cooler toy if he waits and saves for it a bit longer, rather than getting something NOW. This will help later in life!
Take some companies that your child knows, such as Lego or Pixar, and pretend to buy shares in these companies. Then check out each company’s shares as they rise and fall, and learn about investing as you play.
Search for Better Deals
You can teach your child to be slow to spend as you teach about checking for better deals before buying spontaneously. Show him how this can add up over a few items. Explain that shopping around for a better price is wise, and that you don’t have to give in to instant gratification because an item is right there in front of you. In a fast paced, instant gratification world, teach your child to slow down and be frugal. It adds up and pays off!
Play Games That Involve Money
Play games with your children that teach them about money, careers, incomes and clever business models.
Let Them Learn Through Experience
I recall buying a pair of roller skates when I was young. Then being horribly disappointed when I got home and saw that I had hardly anything left of my spending money. I cried for an hour. I clearly hadn’t understood or properly calculated what my change would be, and how little that could buy me. Sometimes it’s good to let your children learn from experience – it will make them wiser and more careful in the future.
Sort of like banks, reward your child with a little extra if you can see they are saving wisely and diligently. It’s motivating to be rewarded for handling your money wisely.
Learn And Understand Money’s Value
A great exercise to do with your child is have them learn each coin’s value, as well as how they add together. Play matching games, and putting coins in value order. It’s a fun way to play with something that already has appeal, while learning about it’s value.
Teaching kids about money can be fun as well as an exciting investment into their future. Take some time each week to get creative and teach them about using their money wisely. Most importantly, be a good example of a wise steward of the money you earn!
How do you teach your child about money?