Sunday, August 5, 2012

Teaching Young Kids about Money

Many parents make the mistake of not teaching their children about money.  It is important to start talking to children at a young age about money, so they will understand how to spend wisely and save.

There are many opportunities to teach young children about money.   Here are some things I have come up with:

  • Teach your kids early on that money does not grow on trees.  A great way to do this is by giving them an allowance.  And not just because.  It is important to do chores to earn their allowance (after all, do we get paid without working?).  When my kids were young, they earned a quarter a week for doing some basic daily chores, such as help make their bed and clean up their room, as well as weekly chores.  At this point, they earn more and have additional daily chores, such as cleaning up the table, unloading the dishwasher and more.  That money becomes theirs...with supervision.  They must save some of the money and the rest, they can spend (with Mom's approval).
  • Teach them to spend wisely.  Once they have saved up enough money, talk to them about what they want to spend it on.  Help them make wise purchases.  Talk to them about saving for something bigger they may want.
  • When grocery shopping, talk to them about prices, sale prices and what a better deal is.  Make sure to let them know how much the total grocery bill was.
  • When out and about and they want to buy something to drink or snack on, feel free to tell them no, that you do not have enough money to spend on that because you want to save it for something bigger, like going out to eat later.  One thing we used for a while was, "Do you want a Wendy's Frosty or do you want to save for Disney?"  You can put whatever you want in--a movie, going bowling, etc.
  • When you go out to eat, talk to them about the prices on the menu and how by drinking water instead of a beverage, you can save $2.
  • When you fill up your car, let them see how much you had to pay for gas.  
  • If you use credit cards when you shop, explain to them that you will get a bill for everything you charge and have to pay for it all at once.  Show them the bill when it arrives and tell them that you have to pay all the money you owe.
By making your children aware of how money can be used, your child begins to gain a sense of understanding and appreciation of the value of money and hopefully, will grow into responsible adults!

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