As someone who got her first credit card in college and maxed it within a week and who spent a few of my younger (and slightly irresponsible) years learning the art of balancing a budget without bouncing checks, teaching my children fiscal responsibility is extremely important to me. I want them to learn from an early age how to manage money, save, and not have to learn those lessons the hard way like I did.
So over the years, I've researched and grilled other parents for strategies on how to start money lessons early. Here are five simple ways I've found to teach kids what they need to know about money.
1. Give them an allowance
Decide on an amount, no matter how small, and make them earn it. Even the youngest toddlers can help pick up toys or do other small tasks that let them know they don't just get it for no reason.
2. Help them divide their money
Explain that money must cover all aspects of one's life -- both long- and short-term. I've heard of some families who give their kids multiple piggy banks to help it sink in. One for saving, one for spending, and one for sharing (giving to a church or charity).
3. Talk about money choices
When purchasing items in your everyday life, try to talk to your children about how money factors into your choices. For example, if they want one kind of yogurt, but another is on sale, explain to them that sometimes it makes sense to make small sacrifices for savings.
4. Teach them the difference between needs and wants
"Mommy needs a new dress" is probably not as true in many cases as "Mommy wants a new dress." It's okay to buy things we both want and need, but it's important to know (and show them) the difference, and know that needs must come before wants when you're on a budget.
5. Embrace mistakes
Tell them about money mistakes you've made (I have plenty to share) and let them make mistakes too. Use them all as teaching moments to discuss what could have been done differently and how to avoid such pitfalls in the future.
How do you teach your kids about money?
Image via MJ/TR/Flickr
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Comments 6
I think training and education help a GREAT deal, but I also think the person's personality impacts things as well. I've always been tight with money, and it makes me happier to know I have a lot in the bank rather than buying a lot of stuff. My sister and brother, who learned the same lessons from our parents, are spenders. It varies a lot from person to person.
I did all of the above. I did allowances early. Did the dividing up. I have one spender and one saver. I do believe you have to teach kids how to handle money and to see how far and where it goes.