Teaching Kids about Money

You don’t have to be a financial expert to teach your kids about money.

Simply making them aware of costs and how to manage their money is a huge first step.

Here are a few ways to teach kids about money this summer:

1.    Model good financial behavior for your kids

This is probably the most important. Kids learn more by what you do than what you say.

If you spend money and give in to impulse buys and instant gratification, they will learn to do the same.

If you compare prices, wait 24 hours before purchasing a want, and consider trade-offs, they will model this behavior.

There is a fine line here in enjoying the moment and being flexible and also not spending money on impulse buys that they’ll enjoy for 30 mins and then it’s junk in your house.

2.    Give kids chores

Summer is the perfect time for a chore list. You can either pay them allowance or not, but either way chores teach kids how to work and contribute to the family. AND takes some stress off of your plate.

This responsibility taught early on will pay dividends in the future when your children are ready to work and earn money.

3.    Teach kids how to save and spend money

I am personally a fan of giving a small allowance for chores. Exposing them to the feeling of earning money early on in life is a good habit to start. They feel proud and a sense of accomplishment.

They also learn to save money for things they want. And they learn to spend their money wisely.

 A child will always think long and hard about spending their $10 vs just spending $10 of YOUR money. Give them that exposure to weighing the cost and benefit and making the decision on their own.

4.    Encourage older children to earn money

Older kids should be encouraged to earn money to buy some of their own “wants”. Dog sitting, babysitting, washing cars, making and selling jewelry or baked goods are a few ideas. They can put out a flyer in your neighborhood or advertise on your social media.

It’s amazing the support you get from neighbors and family when a teen is willing to work. And it is SO fun to watch your kids think creatively and feel a sense of accomplishment when THEY earn money rather than just asking for money from you.

 5.    Teach kids about trade offs

Kids are going to want to do ALL THE THINGS during the summer. They’re going to want to go to the theme park, get ice cream, go get fast food, go to the movies ALL in one day!!

Tell them what things cost. Explain to them the value they get for the price of each experience or item.

Example – they want to go out to get ice cream and go to the trampoline park. You may tell them that it’s $15 for the trampoline park for 2 hours of fun, or $5 for ice cream for about 5 minutes of enjoyment and let them decide what they would rather do.

6.    Talk to your kids about needs vs wants

 Having open discussions about needs vs wants is huge. During grocery shopping, consider only letting your child chose 1 or 2 wants (think candy, chips, ice cream). Have them make a decision on what they’d rather have and not give in to every “want” they request.

7.    Don’t be afraid to say no to your kids

This is SO hard during the summer, I know. But don’t guilt yourself into doing all of the fun expensive things. Your child will be perfectly fine if you do some memorable free experiences during the summer vs. expensive theme parks, etc.

You may do one higher cost experience per week, and explain to the kids that if you do x you won’t be able to do y until next week.

8.    Make room to say YES to your kids

When you do go out for a more pricey treat, or say yes, ENJOY every minute of it. Let it be a fun experience you all appreciate and remember.

Tell your kids how lucky they are to get to have this moment and explain the value in it…even if it’s just a 30 second conversation. It doesn’t always have to be a 10 minute monologue or teaching event about how fortunate they are.

 It’s the small things that are repeated that they’ll remember.

 Bottom line is the earlier kids learn about money the better. If they develop a good relationship with money early on in life, they will be better prepared to make good financial decisions as an adult.

Have a great summer!!