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5 Ways to Teach Your Kids About Money! How do/will you teach your kids about money?

Posted by on May. 1, 2012 at 3:14 PM
  • 4 Replies

5 Ways to Teach Your Kids About Money

Posted by Julie Ryan Evans

girl with cash registerAs someone who got her first credit card in college and maxed it within a week and who spent a few of my younger (and slightly irresponsible) years learning the art of balancing a budget without bouncing checks, teaching my children fiscal responsibility is extremely important to me. I want them to learn from an early age how to manage money, save, and not have to learn those lessons the hard way like I did.

So over the years, I've researched and grilled other parents for strategies on how to start money lessons early. Here are five simple ways I've found to teach kids what they need to know about money.

1. Give them an allowance

Decide on an amount, no matter how small, and make them earn it. Even the youngest toddlers can help pick up toys or do other small tasks that let them know they don't just get it for no reason.

2. Help them divide their money

Explain that money must cover all aspects of one's life -- both long- and short-term. I've heard of some families who give their kids multiple piggy banks to help it sink in. One for saving, one for spending, and one for sharing (giving to a church or charity).

3. Talk about money choices

When purchasing items in your everyday life, try to talk to your children about how money factors into your choices. For example, if they want one kind of yogurt, but another is on sale, explain to them that sometimes it makes sense to make small sacrifices for savings.

4. Teach them the difference between needs and wants

"Mommy needs a new dress" is probably not as true in many cases as "Mommy wants a new dress." It's okay to buy things we both want and need, but it's important to know (and show them) the difference, and know that needs must come before wants when you're on a budget.

5. Embrace mistakes

Tell them about money mistakes you've made (I have plenty to share) and let them make mistakes too. Use them all as teaching moments to discuss what could have been done differently and how to avoid such pitfalls in the future.

How do you teach your kids about money?

by on May. 1, 2012 at 3:14 PM
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Replies (1-4):
Mandi812
by on May. 1, 2012 at 4:48 PM

I like a method I had seen on Super Nanny or it was wife Swap, i cant remember what show.

The Family had a Chore Chart.  When the kids did their house work ect, they got "Home Bucks"   If they got in trouble the parents were to take away a appropriate amount of the "Home Bucks"

The Parents in stead of just giving their child a Xbox game, or a Jump rope, a GiJo, would purchase these items, and put them in their In "House Store".  Each item was labled with a cost of "Home Bucks"  At the end of the week their kids had a choice of choosing to purchase a item or hold on to their "Home Bucks" to save up and get one of the Larger more costly items.  

I think this is a good lesson.  It was teaching the kids the lesson of earning and saving their money and that things were not just given to them with out hard work.

aprilz1225
by Silver Member on May. 1, 2012 at 7:17 PM

 Conner  already  coupons with me. and knows that when a toy he really wants he needs to use his allowance to pay for it if it is over 10 bucks. He looks for sales too...

SarahSuzyQ
by Sarah on May. 1, 2012 at 8:24 PM
I don't really care for the idea of tying chores to allowance... After all, moms and dads don't get paid for chores - we do them because it's our responsibility to our family. My son is also part of the family, so I don't pay him for chores.

We do have allowance, and when he gets older I would consider allowing him to do extra work around the house to earn extra money.

I really like the three envelope system, but it's a little too abstract for us right now. I hope to implement some version when he gets older. For now, we identify a big ticket item and save up for it. If smaller things come up along the way, we try to help him weigh the cost and whether it's worth the setback it will cause for the bigger item.
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meam4444
by on May. 2, 2012 at 9:04 AM

While we don't give allowances on a regular basis, we do occasionally reward them with a dollar here or there.  As far as teaching them, I shop with my five and three year old and we talk about prices and such.  Also, my five year old know how I use coupons to save money, etc..  She is pretty good about saving for something she really wants.

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