When you want to teach kids about money, it’s important to think about the audience first: what are your kids ready to learn? It’s not enough to engage in conversation and teaching; your kids have to be ready to learn what you’re trying to teach.
Many parents find that talking to children about money is awkward, but it’s just as important to talk to your kids about money as it is to talk to them about the facts of life or drugs. If you look back at your younger years and cringe at how you handled money, recognize the opportunity you have to help your children do better. Here are 12 age-appropriate ways to teach children how to save money:
- Set a good example. You can’t start this too early, and you can’t give this up too soon — toddlers will see how you use paper money and coins, and teenagers will listen to how you talk about money. When it comes to kids, you’re always on stage, so do your best to act responsibly.
- Give your kid a piggy bank. Piggy banks are fun. At first, kids don’t understand why they’re putting change in the little beast, but the first time you open it up, and go to the store and buy some treats, they’ll understand.
- Teach young kids how to use money to buy things. This is easily tied in with the piggy bank. It’s fun to spend money! Teach kids how to find something they want, understand it costs money, then help them to buy it.
- Show kids the importance of saving up to buy more expensive items. Soon, what they want to buy will be larger than their available funds. They’ll have to save up. This is a key moment, as kids aren’t naturally savers. They want everything NOW! Showing them how to save, and the importance of saving even if you don’t have an immediate goal, is an important lesson at this age.
- Teach kids how to look at and compare prices. Take kids grocery shopping. Show them the price difference between name brands and store brands. If they’re older, have them figure out the price difference for smaller vs. larger boxes. For advanced kids, look at buying raw ingredients for bread, or cake, or pizza – and compare the cost against the prepared foods.
- Start giving an allowance for increased responsibility. Remember, giving an allowance isn’t a gift – it’s money you were going to spend on them anyway. An allowance is just a tool to help kids learn how to manage that money.
(to be continued next week…)