How to Teach Kids About Money
My girls are starting to show interest with money at a young age. They see me finding ways to save money and cut costs on a regular basis. My oldest daughter will be entering third grade soon and I feel that she is ready to learn about money. My youngest likes to do what her sister does and this is a great time to get both children involved. As a parent, I need to do the best I can to guide my children to make smart money decisions and choices to last a lifetime.
My girls earn money completing chores and they also receive money for birthdays and holidays. Because they receive their own money and will receive money on occasion for years to come, it’s a great idea to have a plan in place for their own money. The Money Savvy Piggy Banks (pictured at the top of this post) allow my girls to place money in four different areas: save, spend, donate, and invest. This piggy bank provides a fun way to teach about money!
My girls each have a wallet of their own (pictured above) that they are allowed to take when we go shopping. We take the money from the “Spend” area of the piggy bank and place it in their wallets and they are allowed to buy something that they want from the store – usually around $5 or less. During our last shopping trip, my girls each picked out a little craft item to work on at home. When we arrived at the register, the girls gave the cashier the money for their item and received change along with their receipts. I like to have the girls involved in the entire buying process from start to finish.
This last Sunday, I asked my girls to take $1 from the “Donate” section of the piggy bank and place it in the plate at church. This was difficult at first for my oldest daughter. She didn’t want to give away her money, but I made sure to talk to her about the importance of giving and she quickly agreed that giving her money was the right thing to do.
One thing I’ve witnessed during this process of saving money is that my oldest daughter is very picky with her own money when she gets the chance to buy something. This shows me that she truly wants to spend it on items that she really wants and loves and doesn’t just spend it to be spending money. She chooses what she wants carefully and selectively and this is exactly where I want her to be!
My children are still young and I have a lot to teach them about money. I believe that managing money is important and I want to make sure my kids learn money skills to last a lifetime. With the brand new school year approaching, I feel confident that we will make wise money decisions during the year and teach important money skills along the way.
How to Teach Kids About Money
1. Be the example. If they see you spending money on things, they may be more willing to spend their money, too. If you save your money and talk about saving your money, your child will pick up on that and may choose to save their money vs. spending it. Talk about why you are saving your money (to pay off debts, to save for your future, their college, or even to give to others!)
2. Give your child/children a special place to keep their money. Kids love crafts. Allow your children to make piggy banks out of empty containers or boxes. If you don’t want to go the crafty route, you can purchase a piggy bank as a gift for them to get them excited about saving money. I recommend the Money Savvy Pig since it has compartments for saving, spending, donating, and investing.
3. Give your child special jobs to earn money. Kids love to help! They also love to earn money! Teach them that through hard work, they can earn some money. It doesn’t have to be a lot of money. Even $5 a week seems like a lot to young children. I know that some parents do not like to offer allowances, but it’s up to the parents. We do like to give an allowance and we like to give our children their own money to save and spend.
4. Allow your child to complete the purchasing process. By this, I mean that when you go shopping, let your child pick out what they need, place it in the cart, and even pay for it with their own money at the register. My girls love receiving change back from the cashier after making purchases.
5. Be patient with your children and communicate with them. Especially when it comes to saving. Some children will want to spend their money right away and buy things that we consider “junk.” Talk to your children throughout each purchase to make sure that when they are spending their money, they are being smart about what they are buying. Every now and then it’s okay to buy toys, etc., but we don’t want to teach them habits of buying stuff they don’t need just because they have money.
How do you teach your kids about finances and saving money?