We deal with money every day, and kids pay more attention to these interactions than we think. We should Teach Your Kids About Money in every step of life.
Whether you’re paying for things at a store checkout, taking money out of an ATM, or looking at the prices of items on a restaurant menu, every day is a chance to teach your kids good money habits and help them understand how money works.
Even though APRs and 401(k)s are too complicated for young children to understand, there are many other financial concepts that can be taught early on to help children learn about money and saving. Over time, this knowledge can help them develop their own sophisticated ways to handle money. This will give them the financial knowledge they need to get through adult life and make good financial decisions.
Want to teach your children about money? Here are some ways you can start teaching about easy money right away.
1. Teach young kids about coins and how much they are worth.
Even before a child goes to school, you can teach them how to tell the difference between coins by playing a game with them. Once children understand these different values, you can open a pretend store and make buying into a game: Have them trade coins for things sold in the store to teach them about the basics of business.
In the end, you can use these ideas and the money the child has saved in a piggy bank to show how this works in the real world. Take them to a store and tell them to buy something small, like a candy bar or a small toy.
2. Ask your kids to cut coupons with you.
This is a simple job that can also be a fun way to teach something. Tell your kids which coupons to cut out of supermarket ads and other ads, and have them read off the value of those coupons.
Tell them that coupons are a way to save money, and bring them with you to the store so you can show them how coupons can save you money.
3. Give them a fixed amount.
Whether or not you give your kids an allowance for doing chores, it’s good to give them a small source of income so they can learn how to handle money on their own.
For big purchases, you might need to save your allowance money for a few weeks. Don’t give in to the urge to help them pay for these things right away. Instead, teach them how important it is to save.
Over time, this allowance will teach them how to live on a certain amount of money and help them develop their own ideas about how much to spend and how much to save.
4. Start saving money.
Many banks have savings accounts for kids with low minimum balances so that kids can learn about banking, saving, and interest rates.
Bring your child to the bank and help them open a savings account just for kids. Tell them what an interest rate is and how it can help them earn money over time. Show them how to use simple math to figure out how much they can earn in a year based on the interest rate on their savings account.
5. Teach your children how to compare prices.
As kids get older, teach them how to compare prices, especially when buying bigger items where the savings can be big.
Show your kids how to read price tags when you go shopping for things like groceries, and have them figure out which brand has the best deal. This teaches them how to be smart shoppers who do their research, make their money go further, and spend it wisely.
6. Set a good example for how to handle money in a responsible way.
Ultimately, kids inherit many of the spending behaviors of their parents. If you spend a lot of money or save it very carefully, your kids will notice and naturally follow your example.
With kids looking over your shoulder, it’s a good time to be more aware of what you say and do and make sure you’re doing the things you want your kids to do.
Sticking to a budget, making wise spending decisions, and communicating the reasons behind your decisions are all ways you can instil important money lessons through your own behaviours.
When you teach your kids about children will benefit from learning about money for the rest of their lives, no matter what their income is. By teaching these ideas to your kids when they are young, you can help them be more financially stable as adults.