With a 5 year age gap between my children, teaching my kids the basics of money can be challenging. Gavyn (10) knows that money has to be earned to buy things and to earn that money we have to work. Zoe (5) doesn’t comprehend it yet. While shopping in the stores, she can point at several different items she “wants”, and we always go back to the same conversation that bills, food, housing and other necessities must be paid before we can spend on items we do not need. Fortunately, I have amazing money skills, taking control of my money at a young age so am trying to instill that in both of my kids for successful futures, so they do not need to struggle.
As a parent, there are a few tips I’d like to share with you on how I am teaching my children about money.
- Make sure children understand that money is earned by working. When your kids see that you work hard to have a home, food and the bills are paid, they are going to “hopefully” grow up working hard so they can have the same. Kids can start at a young age earning money by having a small lemonade stand and selling cookies when you’re having a garage sale.
- Open a savings account with your children. By doing this, children can place their allowance if they have one or piggy bank money in their account and watch their money grow. If they want that new $50 video game and only have $40 in their account, they accept they do not have enough money to spend. They can then choose to buy something else that is more affordable or choose to save their money. Kids will learn the value of saving when they see their money increase. I recommend opening an account without any monthly fees and one that will gain interest.
- For younger children, start counting coins and bills with them now. This will help them identify the value for things they want such as an ice cream cone after school. When we pay for all their “wants” they are not gaining anything from it, other than mom has money and will pay for the things I want.
- Bring kids to the ATM and bank with you. Explain that the money you are withdrawing, is the money you earned from working hard, and not the banks. Make sure they understand that if there is no money in the ATM, there is no money for them to eat, drink or have a roof over their head. This is a great time to explain the words such as withdraw, checking, savings, balance and deposit.
- Budget with your kids. My kids always see me meal plan, clip coupons, price compare and understand why I buy generic. Having the kids involved will help them understand that when we can budget our meals, or save money by clipping coupons, that we are essentially saving money for other purchases such as clothes, or the occasional night out to dinner.
Although, these are only a few tips on teaching children about money, they are a good way to prepare your children for the money discussions. Children will gain knowledge at home, school and through reputable places such as Genworth Financial, who are there to help families secure their financial lives. Make it fun for the children so they can have a successful financial life. Start talking to your children now and setup a budget plan with your kids. Sure they’ll have financial mistakes like we all do, but this will help them understand the consequences and how to better manage their money.
How do you help teach your children about money?