7 Ways to Teach Kids About Money
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Kids really seem to believe money grows on trees. Unless parents teach kids about money, they’ll be in for a rude awakening.
According to Bankrate, “Only 16.4 percent of U.S. high school students are required to take a personal finance course” and “84 percent of respondents agreed that high school didn’t prepare them to handle their money.”
I don’t want my girls to leave home not knowing how to handle their finances, which is why I am being intentional about teaching my kids about money.
Here are 7 things I am doing to teach my girls about money.
1. Talk to Your Kids About Money
The first thing I had to do was get over being uncomfortable talking about money. In America, talking about money is so taboo. But, if we don’t talk to our kids about money, who will?
Start by simply explaining that money doesn’t grow on trees. Explain that you work to get a paycheck. Then, you use the money from your paycheck to pay for the things you need, such as utilities. You’ll probably discover your kids are surprised to learn you have to pay bills for things like water and electricity.
Then, explain that you use the remaining money to pay for the things you want, such as vacations and toys.
2. Give Your Kids Opportunities to Earn Money
Teaching kids about money requires hands-on learning opportunities. This means that you need to give them opportunities that model how money works.
Instead of just giving them money, give them an opportunity to earn money, such as doing chores or hosting a lemonade stand.
3. Discuss Opportunity Costs
Start explaining that every “yes” means a “no” to something else even when kids are young. Even as an adult, this is a hard concept to understand! When we say “yes” to one activity, it means “no” to another activity.
The same applies to spending money. If my daughter spends her money on a pricey toy, it means she won’t have money to spend on a different one.
4. Show Your Kids Your Receipts
There is a surprising amount of power in showing kids your receipts. Again, this is uncomfortable at first. But, receipts make money tangible.
For example, kids don’t realize how quickly things add up. Show kids your receipt from stopping to get fast food so they can see how each small meal adds up.
5. Play Money Games
Teaching kids about money doesn’t have to be boring. Pull out some classic board games like Life or Monopoly. In addition to requiring kids to use math, these also teach important financial habits.
6. Teach Kids How to Shop the Smart Way
I love shopping – and so do my girls! But I am trying my hardest to teach them how to shop smart.
Whenever I can, I point out sales and discounts.
Similarly, I also encourage my daughters to do price comparisons. For instance, if they see something they “have to have,” I’ll make them wait and look it up online to see if they can find it cheaper somewhere else.
7. Get Them a Kid-Friendly Debit Card
I am a big fan of kid-friendly debit cards like Greenlight. These cards are connected to a parent’s bank account and put parents in control. With the cards, I can control where they shop and how much of their allowance goes into spending, saving, and giving.
Plus, my girls feel so grown up using their own debit cards when shopping. They take great pride in shopping with their own money.
