As an adult, you’re (hopefully) well aware of the importance of spending your money responsibly. You know how important it is to pay your bills in full on time. You understand how long it takes to earn money and how serious it can be to fall behind on payments. We see these as important life lessons, which is why it’s important for our kids to learn them too. If you’re a parent and unsure of when and how you should talk to your kids about money, this article is for you.
Many financial experts stress that as soon as your child is old enough to start understanding numbers and counting, you can discuss money. It is a matter of the approach you take since it needs to be age-appropriate. Here’s a look at 15 practical ways to teach kids about money.
Explain the Concept of a Budget
A good place to start when teaching kids about money is explaining what a budget is. Budgeting, that essential cornerstone of financial stability, can be taught in a fun way through books and other creative methods. Just as the US’s best-known casino websites attract adult players with exciting games and rewards, parents can engage kids with fun, hands-on activities that teach them the value of money from an early age.
Help Kids Set Up Their First Budget
After talking about the importance of a budget, take it one step further and help your kids create one. If your child is a tween or teen, it might be best to use a budgeting app. These apps are engaging, easy to use, and customizable.
Provide Kids with an Allowance
If your child is too young to have a job, then it’s a good time to set up an allowance system. Each family approaches allowances differently. Generally speaking, the amount of money your child receives should increase each year, ideally on their birthday. An effective way to teach kids about earning money is to use a chore chart.
Buy Kids Their First Wallet
Now that your kids are earning some money, they need a place to store it. Buying a child their first wallet helps boost their interest in money matters and teaches them how to store money carefully.
Give Kids a Chance to Make Additional Money
Beyond their allowance, you may also want to give kids a way to earn extra money. This can help them save more, and faster.
Teach Kids the Value of Saving
Speaking of savings, this is also an important financial lesson for kids to learn. Teach kids about setting a percentage of their allowance aside for savings. This creates a habit they can carry into their working years.
Assist Kids in Setting Savings Goals
Savings is another topic that should be broached when discussing money. Everyone benefits from having savings, as they serve as a safety net for unexpected expenses. You can work with your child to set up a savings goal and then discuss ways they can turn it into reality.
Open a Bank Account for Your Child
You may want to speak to your bank about what age a child can open a bank account. Typically, you can open a regular account and a savings account that is designed for long-term growth.
Teach Kids About the Cost of Everyday Items
The next step in the process should be to discuss how much things cost. This can be a real eye-opener for kids. Again, this will need to be age-appropriate, but the goal is to ensure they are prepared for the expenses that await in adulthood.
Have Kids Pay for Items
There is no better lesson in learning about what things cost than having kids pay for items. If there is a particular toy, gadget, or item they want, get them to pay for it. This will encourage them to save and teaches patience.
Help Kids Recognize the Pitfalls of Impulse Buying
Impulse purchases are something that can negatively affect everyone’s finances. Teach your kids that giving in to impulse purchases means their savings goals will take longer to achieve.
Talk to Kids About Their First Job
Is your child old enough to get their first job? If so, you can talk to them about what to expect. Guide them on the types of jobs that are common for students and what minimum wage is.
Help Kids Write a Resume
Kids will undoubtedly need help writing a resume, which needs to be professional, direct, and effective. There are plenty of online resources, tools, and templates you can use to guide the process.
Provide Job-Finding Tips
After your child has created a resume, now it’s time to get out there. You can support them in distributing resumes, help point out any ads in the paper, and use online job search tools. Be sure to encourage persistence, even if the process takes time.
Introduce the Idea of Charity Early
Finally, it’s never too early to talk to kids about donating to charity. Even if they only donate small amounts, it’s a fabulous lesson. It’s about showing empathy and compassion for others who may be less fortunate.
Financial Education Sets Kids Up for Future Success
Speaking to kids about money isn’t optional. It is a necessary life skill. Talking about money early lets you adjust the message and tools over time. Remember, you’re doing this to help set them up for financial success as an adult.