Parents place such an important part in teaching kids about money yet many parents take it for granted that children will learn these skills eventually on their own. As you may have probably noticed by now, many teenagers do not have a solid understanding of what finances are and how they should be. Most kids don’t have any clue about money and they just figure their parents have an endless stream; this stems from the problem of getting our kids anything they want without explaining to them that these items cost money.
Teaching kids about money just became a lot easier for you if you follow these few tips:
- When your kids are old enough to count you can start teaching them to count money. Layout five 1 dollar bills on the table and explain to them that these dollar bills equal five dollars. As they get better at counting, increase the denominations so that they see how many bills and combinations of bills equal 20, $50, and even $100. Do the same with coins.
- Explain to them that it’s wise to save your money. Give them a piggy bank and start giving them an allowance while telling them to save their allowance in the piggy bank. As a guide, I have personally used my kids’ ages to determine their weekly allowance. For example, my 11-year-old daughter gets $22 biweekly.
- Try to set some goals for your kids so they can save up money for specific objects or products. For example, if your daughter wants to save money for a dress she has her heart set on, explain to her that she will have to save money in order to buy it. It’s tempting for us as adults to just go out and splurge our money and buy our kids whatever they need. However, you could use these situations to teach your child an excellent lesson in finances if you allow her to save money so she can eventually buy the item herself. Think about the pride associated with the child taking money out of their piggy bank and buying something on their own. This is a great lesson in life.
- If you have any extra chores that need to be done around the house, why not reward your children with a little bit of extra money so they can see how working has its rewards. This will reinforce their belief that they can work for their money and they can further learn how to save their money wisely.
Teaching your kids about saving money takes a little bit of time but it’s well worth the effort. Stay consistent and patient, and when your kids turn 13 or so, don’t be afraid to open up their very own savings account if your particular bank allows it.