Let’s face it - teaching kids about money can be difficult and even uncomfortable.
When you’re a kid, sometimes you really do think money grows on trees, or you’ll blow every last cent in your piggy bank on a shiny new toy. Plus, plenty of adults struggle every day with their saving and spending habits.
Some people think teaching kids about money means teaching them interest rates, the stock market, compound interest, and other complicated topics.
So, they may wait until they think their kids are old enough to understand such things. But that’s not always true - you can teach younger children good spending habits in ways they can understand.
According to Forbes, the sooner you start teaching kids to save money the better. In an article published in 2013, Forbes says you really can't start teaching about money too early.
That’s why we’ve compiled our list of tips for teaching kids about money. Read through these tips and see which ones you can apply with your own family.
Our money saving tips include:
The first step in teaching your kids why it’s important to save money is teaching them the importance of delayed gratification.
Explain to your child that while getting something they want right away may be fun at the moment, it’s so special to get something later on that you’ve worked hard and waited for and that you can now comfortably afford. You can break down into simpler terms, asking them if they’d prefer 1 cupcake now, or 2 cupcakes later.
The Value of A Dollar
Many people claim they really started to understand the value of a dollar once they got their first part-time or summer job. If your kid is too young to work, there are still plenty of other ways they can earn their own money.
You can have them do chores around the house to earn an allowance, or they can get a paper route. If you’ve got good neighbours, your kids can offer to shovel the driveways or rake leaves for some money.
Once they earn their own money, they’ll truly realize how hard it was for them to earn it, and they’ll think twice before spending it recklessly.
Spending vs. Saving
Kids need to know there is a balance between spending and saving. Meaning, don’t spend all your money at once and you don’t need to save it all at once. For example, they can spend half their allowance and then put half of their allowance into their piggy bank or savings account.
For this to work, kids need somewhere to save their money. When they’re young, a piggy bank is a good place to start. As they get older, they can open and manage money in a bank account.
Nothing makes kids realize how lucky they are like volounteering with a charitable organization. You can take your family to a food bank, a community fundraiser, or even a soup kitchen.
If kids realize how lucky they truly are, they may be a lot less likely to whine and complain about what they don’t have and be more appreciative of what they do have.
Back to Basics
In today’s world of contactless debit and credit cards, money is often not something tangible. If your kids are seeing actual bills and coins, they may have an easier time understanding how it works.
If your kids are old enough to have their own bank accounts, go through their bank statements with them and show them how money going in and out is updated through their account.
Don’t Be Secretive
In our society, it’s considered very taboo to talk about money. However, if you don’t act secretive or ashamed of our finances, your children won’t either. Instead, be open with your kids and talk openly with them about budgeting.
You can easily involve them in weekly expenses. For example, you can involve your kids in your weekly grocery shopping trip and tell them what you need to buy for the week, and how much you can spend at the store. Take them through flyers to compare sale prices, and you can even have them clip coupons.