It's never to soon to talk to your children about finances. Simple lessons now can help them learn to save money and become financially responsible adults.
Children learn by example. Make sure the money messages you're sending are the right ones.
Opportunity is Always Knocking
- Don't miss the chance to discuss potential money-smart ideas.
- If your children want to get a specific item or toy, engage them in meaningful conversation. Ask how much the toy would cost, how they plan to pay for it.
Take a Look at Your Own Example
- Do you spend more on your vehicle than you can afford?
- When you shop, do you pay with a credit card to pay every time?
- Is money and your financial situation something that is openly discussed in your family?.
A Penny Saved
- First grade or even earlier is soon enough to begin learning the value of saving. Set an appropriate allowance based on the child’s maturity and ability. The good old-fashioned piggy bank is a great way to start.
- There are also more high-tech options in banks today that keep track of the money as change is put in and helps little ones see how quick change can add up.
- Discuss goals for rewards that allow redeeming some of the savings at certain milestones.
Wants vs. Needs
- Really listen to what your child is saying about money. There are many times when a money lesson can be taught in a positive way when we understand as parents what are children are trying to convey.
- There is also wonderful opportunity through dialogue to explain the concepts between “I want” and “I need.”
Save, Save, Save
- Help your children save on a bigger scale by transferring some of their piggy bank to a savings account.
- Have your children be involved with the monthly statements and monitoring of the deposits.
- Try to make a regular, scheduled deposit, no matter how small, to get them into the habit of regularly saving.
- learntosave.org has an informative and kid-friendly section on their site that helps kids learn the principals of financial responsibility.
Fool Me Once
- Remember, mistakes happen and money is no exception. Try to handle money mistakes in a positive way. Present an error in judgment as an opportunity to learn from a mistake, not be punished by it.
No Means No
- Accountability is important. Mistakes are acceptable, but abusing the idea is not. Clear cut dialogue and expectations of spending and saving is important, especially as your children become older and want to become more in charge of their finances.
- Guide children gently and make sure they are aware of the limits of their own funds and what they can ask for from you.
Practice the financial values you want to teach your child; it’s never too soon to start teaching your children the importance of money management.
The copyright of the article Teach Kids to be Money Smart in Kids & Money is owned by Elizabeth Richards. Permission to republish Teach Kids to be Money Smart in print or online must be granted by the author in writing.
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