Five Simple Ways to Teach Kids about Money

There is no better way to begin teaching your child the value of money than by them having a vested interest in it. That includes making money the old-fashioned way, earning it. Saving it for certain items they want to buy and actually having a bank account will teach them early money management skills.

It is also good to model how they can use their resources to help others by giving to local charitable causes to help those less fortunate than them, to help needy animals or even contributing to causes at church. The earlier you start your child on the road to learning how to save and manage money, the more comfortable and adept they will become with it. And it will bring them closer to getting their piece of the American Dream someday.

Earning Money

It can be an easy trap to fall into — you do well and you want to give your children the best things in life but that doesn’t mean always giving them a free ride. It is good for kids to understand what it is like to earn their own money – even if it’s in exchange for their weekly chores that get rewarded with an allowance.

Even young kids can do small jobs like walk a neighbor’s dog, put out an elderly neighbor’s trash, or shovel a walkway for a few dollars. Any job will give them a sense of purpose and reward. Don’t deprive your child of that sense of capitalistic satisfaction.

Dividing Money Up

Labeling jars for saving and spending is a simple and visual tool to begin showing youngsters the basics of money management. Once they master the basics, take them to the bank and open a savings account where they stand in line and make a deposit just like a grown up.

Buying Stuff

We all know that toys don’t magically appear out of nowhere. But to kids, it appears they do. Allow them to choose things they want to spend their money on, to see how much they cost, how long it takes them to earn enough to make a purchase and to make the purchase. It will be a valuable and fun experience for them.

Sharing the Wealth

It is important for children to learn the power they have to help others by sharing their resources with others who have less. This can be accomplished through contributions from what they earn or by hands-on volunteer work. During the holidays, they could also use their own money to buy specific items like gloves or hats for children who need them.

Shopping with Discernment

Learning to curb impulse buys early will help your child learn discernment and save them from some buyer’s regret. By learning to refrain from every impulse and to instead allow some time to go by to see if they still really want something a few days later, or even overnight, will help them develop a habit of considering purchases instead curb of feeding the instant gratification monster.

Learning about money early on will give your child a greater sense of comfort around money and confidence in their ability to earn it, save it and manage it. It could even help them become a homeowner at a young age.