How to Teach Your Kids About Money
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No parent wants to raise a child who grows up to be an entitled brat who thinks everything will just be handed to them. Likewise, no parent wants their child to grow up without having a clue how to manage money and winds up being broke or in massive debt.
It is hard to teach kids about money. Why? Well, first, it’s because kids typically don’t have any. We have the money. Next, it is hard for kids to grasp – especially since parents these days mostly use credit cards and pay bills online. Finally, it is uncomfortable to talk about money with kids.
However, just because it is hard to teach kids about money doesn’t mean we should avoid doing it. Instead, we should make efforts to teach our kids about money to prevent them from making serious money mistakes as college students and young adults.
Show Them the Value of a Dollar
One of the most difficult things to teach kids about money is the value of a dollar. This is because we generally don’t include kids in purchasing discussions. Instead, when it is age-appropriate (such as when they start learning about money in school), begin pointing out the costs of various items and comparing them to others. Explain that the big toy they want for Christmas costs much more than the winter jacket you are purchasing.
Make It Visual
Piggy banks are great for kids, but if you just leave the money in there without ever looking at it, kids will forget its worth. Instead, count the money inside the piggy bank every so often. Or, invest in a clear piggy bank or a bank that counts as money is inserted. Kids need to “see” money add up.
Give Them Opportunities to Earn Money
We are the ones who pay the bills and buy clothes and put food on the table. But, if we want our kids to have a good understanding of money, then we need to give them opportunities to earn money. For example, my girls ran a lemonade stand on a hot summer day.
Explain Why You Give
A key lesson involving money is teaching kids not to be greedy. A great way to help kids avoid being stingy is to start them giving to others when they are young. Make this a regular thing for them to do. For example, every time they get money on their birthday, teach them to give a portion of it to a charity they care about.
Teach Them to Save
Many adults do not have a savings account, which is pretty dangerous. Help your kids make wise decisions with their money by teaching them to save a bit early on. Like the giving section, make it common practice to take some of the money they’ve earned or received and put it straight into their piggy bank.
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