It is almost never too early to teach your kids about money and finance. That being said, it is not always easy to teach a young child about financial matters. If you are struggling with how to teach your kids about money, we can help.
Here are 10 simple ways to start teaching your children about money matters.
1) Let A Website Do It
If the last year has taught us anything it is that online education works. ABC Mouse is a great website that teaches kids about more than just reading, writing and math. This website will also teach your kids about money. It is a great way to set the foundation of money knowledge for your child. For young children, it is the perfect first step. It is also free to try, so get your free two month trial..
2) Pay Your Child An Allowance
Whether or not to give your child an allowance is debatable. Some are all for it and others say that they should not expect a reward for doing their part around the home.
One thing that an allowance surely does though is teach your kid about spending and budgeting. If they have a set money limit for a week, an allowance can teach them to not spend all of their money at once and to make it last. When they spend all of their money and have to do without for the rest of the week, they will learn a valuable lesson.
3) Teach Your Kid The Value Of Saving
This goes hand in hand with the allowance.
When you take your child to a store to spend their money, explain how saving money can get them more. Show them the big toy that they can not afford and how they can purchase it if they saved their money.
It is the concept of delayed gratification, which is something they need to become a lifelong saver.
4) Have Your Children Earn Their Allowance
Instead of simply giving your child money every week, make them earn it. If you want to teach kids about money, they need to respect the value of money.
To do this, have them do some cleaning around the home, rake some leaves or some other chore that they remember. Then, the next time they go to spend that allowance, they will know how hard they worked to get the money. They will then now the value of money and will be less likely to waste it.
5) Have Your Kids Pay For Their Items
It is very easy to just pull out the plastic and hand it to the cashier, but that teaches your child very little. Plastic is meaningless while bills and coins carry a lot of weight.
When your kids go to spend their money, have them pay for it in cash. Counting out the money is an important math skill and physically handing over their allowance will have more of an impact. It makes them realize that they can only use money once and then it is gone forever.
6) Talk To Them About Jobs
Talking about what your young children want to be when they grow up is very cute. You get the typical answers like doctors, firemen and the occasional superhero. As they get older though, you need to make this a slightly more serious conversation.
Show your child what the various occupations really do and how much money they make. Also, show them what their paycheck will really bring home after taxes, insurance, etc.
7) Make A Budget With Your Kid
If you pay your child a weekly allowance, have them sit down and make a budget. Have him or her allocate a certain amount of money for toys, apps, candy and, of course, savings. Show them how by having a budget they can make their money last.
Also, make sure that they understand the value of savings. Show them how much money that they could have in a few months if they regularly contribute to savings.
8) Set A Positive Example
It is amazing how much stuff our kids learn just by watching us.
When you do the bills, allow your child to watch you. Also, be careful about impulse buys. Instead of just buying whatever you want, teach them that you would rather wait. Explain that you will wait a few days and see if you still want the item in question.
9) Open A Savings Account
Open an online savings account for your child. Online accounts can be opened with no money down and they pay more interest than most local banks. Show them how they can contribute to their savings and then take advantage of the power of compound interest.
10) Teach Goal Setting
This goes along well with opening a savings account. Teach your children how to make money saving goals and allow them to reward themselves when they reach them. Use charts to show their progress along the way to keep them motivated.