Teaching Your Kids About Money

“Money doesn’t grow on trees.” This is probably a nugget of wisdom we all grew up hearing or saying to our children. But, teaching kids about money isn’t easy. I recently came across an article that offered some real insight about how to engage our children in how money works and I thought I would pass on the tips to you.
  1. Use a piggy bank. There is a benefit to putting a few coins in a ceramic pig and watching the pile grow. Today’s technology even has automatic counters that track the total amount in the “piggy bank”. Instead of just having one piggy bank for your child, get three, and label one ‘spend,’ one ‘save,’ and one ‘give’. This is not only helpful in getting kids confident in money matters, it provides an opportunity for parents to have meaningful conversations with their kids about money management.
  2. Take your children to the bank and explain the process of withdrawing and depositing money. Have them talk to a teller to understand their role in the process. If you tend to limit your trips to the bank because you utilize on-line banking, teach them the process of paying bills or managing investments on-line. It’s important to teach them where money comes from – it does not just come from mom and dad’s wallet.
  3. Be transparent. Have casual discussions about family budgeting. It will benefit them in the long run if they understand the cost of groceries, utilities, rent, cable or their cell phone.
  4. Help them create their own budget. There are valuable tools that can be downloaded on a teenager’s phone that allow them to track and manage their spending and savings.
  5. Make learning fun. Whether you are playing Monopoly, Hot Wheels or Barbies, use these opportunities to incorporate real world costs.

Most importantly, you have the opportunity to lead by example. Our children are constantly observing and absorbing what we do.  Most assuredly they will see how you handle your money and if it creates constant stress for you.