5 Ways to Teach Your Kids About Money
Your kid doesn’t have to wait to learn about personal finances until they’re all grown up. You can teach them all about money right now.
Here are five ways to teach your kids about money.
1. Lead by Example
The best way to teach your kids about money is to lead by example. Children are sponges, and they absorb the things they see around them.
That’s why so many bad money habits are picked up during childhood. Kids internalize how their parents deal with money and repeat the cycle when they grow up.
So, if you want them to take on some good financial habits, you should do your best to show them what to do — not tell them.
For instance, you can show them how to deal with small financial emergencies. All you have to do is stay calm and tell them that this is a temporary financial situation that you can recover from.
Then, take action.
You could reach out to a friend for an IOU or take out a personal line of credit online to cover the emergency costs.
In fact, you don’t have to tell your kids about details like a line of credit qualifications or managing repayments.
You can just let them know that money problems, while important, are nothing to panic over. That you can always find ways to resolve them.
2. Give Them an Allowance
You don’t have to wait for your kid to grow up and get their first job to start teaching them about saving money.
Start this lesson off early by giving them a weekly allowance. That they can save up and buy things on their own.
There are hotly contested debates about whether you should connect your kid’s allowance to household chores. Behavioural experts warn that paying kids to do chores can backfire and send the wrong message about personal responsibility.
By turning household chores into jobs, you’re implying that these are things they need to be rewarded for doing.
Cleaning up after themselves and helping out with the family are things that they should be motivated to do without payment.
3. Get Them a Piggy Bank
Where are they going to save their money? In a piggy bank, of course! It’s the perfect tool to help them collect their allowance and watch it grow.
When they’re older, you can swap their physical piggy bank to a digital one. You can get them their very own savings account.
4. Save Up for Something Special
Encourage your kid to save their money for something special. Like a toy, outfit or video game that they’re really excited about.
Helping them save their money and reach that goal will show them how rewarding being patient and saving your money can be.
Plus, they will love that purchase even more because it came from their pocket.
5. Play Money Games
Make learning about money fun! When they’re really young, introduce the concept of money to them. Play“store” and trading them toys. Take turns playing the shop-owner and the customer with them.
When they’re a little older, introduce family-friendly board games that involve spending and bartering. Settlers of Catan or Monopoly are great ones.
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It’s an easy way for you to introduce them to big concepts like saving up for financial goals and paying taxes without boring them to tears.
They’ll be too busy having a blast to realize that they’re learning.
There are plenty of ways that you can teach your kids about money early on. These lessons will come in handy when they’re all grown up.
Do you have any other tips for ways to teach kids about money?
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Nancy Polanco is a freelance journalist, lifestyle content creator, and editor of Whispered Inspirations. She is a proud Mom to Gabby and Michaela, and wife to Darasak. Having worked as part of a health care team for almost a decade, Nancy is happy to be back to her passion. She is a contributor to the Huffington Post, TODAY’s Parents, and an Oprah Magazine Brand Ambassador.