Money and Kids - Tips for Helping Your Kids With Money

Teaching kids about money, especially in these times of rampant consumerism, is crucial and parents have an important role.

We live in a society where wants have been accorded a higher priority than needs, credit is easy and financial literacy is low. But help is here.

In this article “Money and Kids” these issues are explored with some great money and finance tips to improve financial literacy and help children become money savvy at an early age.

Along with good clear values, teaching kids about money is one of the greatest gifts we can give them and it’s an ongoing process. The money tips you share with your children will vary with age, with the different personality of each child and the household family values.

Money and kids
Money and kids

Teaching money and kids can begin early. Below are some ideas for various age groups and some suggestions for parents as role models:

Money and Kids Age 4-7

With this age group, start with the basics, keeping money discussions money light and fun.

 

Kids Earning Money

Introduce the concept of your child earning money. Even four year olds can do small jobs by helping to weed the garden, putting things on the table etc and in exchange earn pocket money.

In discussion, raise the concept of goal setting. Help your child to focus on what they would like but moderate expectations so milestones relatively close and achievable. One week is a very long time in a young child’s life! You want them to succeed.

Consider whether you would like to “match” their savings. It can be a good idea when the children are young but the pattern may carry over into the teen years when the goals are more expensive.

Kids Saving Money

Encourage saving some pocket money for slightly larger items.

You can start earlier than four with a piggy bank and then graduate to a more age appropriate one and your child grows. This money tip is a tangible way for your child to save money. They can put money in and feel the weight of their savings growing.

Tips to help visualize

Develop colorful charts using stickers to reward the efforts and show progress.

The charts can record (on a daily basis) jobs done successfully and are a fun way for parent and child to keep track.

 

Money and Kids Age 8-12

Goals can be further on the horizon for this aware age group. You know your child and so you will know how far out the goal can be. If you have a “now” child (e.g. they want everything immediately), you can use accumulating money for a specific thing to gently help them out of this issue with immediacy. With a more relaxed child a longer timeframe might work.

Remember that these are their goals.

Kids Earning Money

In the later years, the children will have more opportunity to do small paid jobs like feeding pets for friends or neighbors’.

Kids Saving Money

The piggy bank can still be a good tool for kids aged 8-12. The one shown here is useful for all ages and even has named saving categories - save, spend, invest, donate.

If you haven’t already done so, establish a savings account – see the caution re naming the account in the sidebar later in this article.

Brands versus No-Name - This is a good age to introduce the concept of value regarding similar items like a branded pair of sneakers versus no brand. This will be trial and error so see if they can see past the higher priced branded item.

Of course if you are a buyer of brands then it will be hard to dissuade your child that the brand (and higher price) isn’t important. Instead you may be able to show how savings are possible when items are purchase in sale.

Tips to help visualize

Games are an excellent and fun way to reinforce earlier messages about saving and accumulating.

  • Use the game Monopoly. When you play the game Monopoly, chat to your child about money tips and the accumulation phase which is a great introduction to the acquisition of assets.
  • The Game of Life is also very useful to introduce life’s lessons and money goals in a fun way.

Of course, it’s important not to get carried away with “the lessons” and forget to play the game with them!

 

Monopoly
Monopoly

The Game Monopoly is excellent for teaching kids about money

 
Money Savvy Pig - Blue
Money Savvy Pig - Blue

Piggy bank - with separate sections to save, spend, invest and donate!

 
Learning Resources Pretend & Play Teaching Cash Register
Learning Resources Pretend & Play Teaching Cash Register

Cash register - a great way to introduce children to money

 

Money and Kids Age 13-17

This is the age concepts can become more complex and consolidate earlier information. Your kids will soon be cutting the strings as increasing independence surges through.

This is the time to reinforce needs over wants.

Teens earning money

Greater opportunities for working and earning arise will give your teens a higher disposable income. The goals can get larger perhaps saving for a car later in these years.

With minimal help from you, budgeting should be relatively routine – in an ideal world anyway!

Teens saving money

The savings accounts will be (hopefully) growing steadily.If earning regularly look at the possibility of having two accounts – one for long term savings or for more ambitious expensive items and one for weekly spending.

If feasible look at direct debits from the income earning accounts to a savings accounts. It’s always easier to save money if you don’t see it!

Try to ensure, that with the introduction of an ATM card, that the convenience of it and the illusion of easy money doesn’t erode all the hard work.

Tips to help visualize

Before your kids fly from the nest, introduce them to these books:

  • The Richest Man in Babylon by George S Clason – a perennial best seller this book is approachable for good teen readers. The Richest Man in Babylon has some excellent, but subtle, life lessons delivered in a non threatening way. It’s a must.
  • 7 Habits of Highly Effective Teens by Sean Covey - this excellent book was written by a teen for teens. It’s written to appeal to teens. A CD of the same title is also available.
  • For the more analytical (and older teen) Sean’s dad’s best selling book 7 Habits of Highly Effective People also provides excellent information on achieving, goal setting and more.

You could also introduce them to some growth models which show how money accumulated at different percentages grow and the relationship between risk and return.

 

Risk versus Return

When a child is young, you can take more risk with the money to earn a higher return because they have more time. Just be sure you understand the nature of the risk!

However, this money tip should only be applied for long term savings (say over ten years) and not for money required in the short-term.

 

Money and Kids/Adults 18+

By this age you just hope that life’s important lessons have been taught as your teen prepares to transition to full independence. You may be able to oversee a workable budget before they leave home.

You may also be able to counsel them if they need to obtain a loan for study by talking about the importance of minimizing credit and then paying it back as quickly as possible.

Then, it's up to your teen!

Source: http://business-related-articles.blogspot.com
Source: http://business-related-articles.blogspot.com

Parental Tips as the Teachers of Money and Kids

Your behavior as a parent is important to. What you do is probably even more important than what you say because your children will mirror your behavior and actions.

Money Tips:

  • Set guidelines and enforce them firmly, consistently but fairly.
  • Adopt and adapt (to your family) the goal setting mantra - goals should be tangible, detailed, and realistic and have a time attached to the achievement e.g. I will save $4 per week and buy the Game of Life in five weeks time.
  • Try to set a good example to your kids of how to handle money.
  • Spend what you can afford. If you are a spendthrift, it will be difficult (but not impossible to teach your kids to save.
  • Explore the type of language about money you use around the children.
  • Eliminate subversive behavior in the household e.g. one parent buys something new and encourages the children not to tell the other parent.
  • Even if your record in the money handling department is less than desirable, you can teach your kids the difference between what’s good and what’s not.
  • Save in front of the children. Let your kids see what it takes to run the household – not intimate financial data; just a broad brush idea.
  • Accept that along the way there will be “oophs” moments. They are all part of learning.
  • Understand the power of growth and always save a percentage of your earnings.
  • Share ideas with other parents about money and kids.
  • Have fun with this!

Help! I’m not in a position to give my kids pocket money

 

Even if you are not able to give your children pocket money the “earnings principles” will still apply.

You can reward younger children with non monetary rewards like visits to the park, local museum or similar in exchange for jobs.

Show older children the household budget but take care not to concern them too much with lack of money. Buy the games and the books mentioned here, or add them to grandparents Christmas ideas list. See if your library loans games or try eBay for second hand options.

Once teens begin earning their own money, you can help them open a savings account and with their budget.

 

A word of caution:

When setting up a savings account for your children, depending upon the laws and tax regulations in your country, consider putting the savings account in the name of a trust or in your name as guardian.

If you remain guardian if the money lessons go awry or your child becomes particularly rebellious you will have control and can protect the money for a later stage. If the account is put in their name, when they reach the age of eligibility they can do what they like with it and spend it.

The role of Grandparents/Benevolent Relatives to money and kids

Grandparents/Benevolent Relatives also have an important role.

If you are lucky enough to have such relatives in your family, encourage them to set up a savings program. Alternatively you could establish one for each child and if they desire, they could pay into it. See the caution regarding the name of the account.

 Grandparents may also be able to help out with presents which encourage saving and financial literacy.

Money and kids and improving financial literacy is an exciting proposition

It’s exciting to help our children improve their financial literacy so that they enter adulthood with some excellent money handling skills. These skills will last for a lifetime. Some of the ideas here along with the books and games are to help you introduce the concepts to your children in a relaxed fun manner. Enjoy the process.

Please feel free to let me know your ideas for teaching children about money.

**This article is copyright Travelespresso.  Please respect my work and if you wish to use it ask me.**

Comments 24 comments

dohn121 profile image

dohn121 7 years ago from Hudson Valley, New York

It sounds like you have a lot of experience in this field, travelespresso! I really could have used some advice when I was a kid. I was perhaps too good a kid, so my parents trusted me almost too much with the money I made. I really peed away like a knucklehead when I should have been saving it. I probably would have enough for at least a down payment for a nice house by now!

Wonderful tips as usual. I liked how you had advice for almost every situation in this hub. Thank you for sharing it.


travelespresso profile image

travelespresso 7 years ago from Somewhere in this exciting world. Author

Hey thanks Dohn. Do you ever sleep? You always seem to be first commenting on hubs which is really nice.

One of my degrees is in finance so I do know a little about the topic! Most of us do stuff like you mentioned and most of us had parents who expected this was learned by osmosis.

Thanks for your comments.


Keira7 7 years ago

Great hub with very good advices. Thanks my friend. Bless you.:)


cocopreme profile image

cocopreme 7 years ago from Far, far away

Very good information! I use a ticket reward system with my preschool class. They love it. At the end of the week they exchange their tickets for a prize. I hadn't really ever thought of it as teaching them about money!


travelespresso profile image

travelespresso 7 years ago from Somewhere in this exciting world. Author

Keira - you are very welcome. Thanks for stopping by again.

Cocopreme - thanks also. The ticket system sounds great and it helps to teach the children that they "earn" something in exchange for doing something. It's a great skill to learn. Thanks for sharing.


janiek13 profile image

janiek13 7 years ago from Florida's Space Coast

I wish my parents had instilled in me those types of lessons. It really is oh so important. Great hub!


travelespresso profile image

travelespresso 7 years ago from Somewhere in this exciting world. Author

Thanks for your comment janiek13. It's really important. However, sometimes even when parents do, the child is not ready to learn the lesson. You know that old saying when the student is ready the teacher will appear.


GeneralHowitzer profile image

GeneralHowitzer 7 years ago from Land of Salt, Philippines

Quality Hub here eh... Thanks for sharing... just bookmarked it...


travelespresso profile image

travelespresso 7 years ago from Somewhere in this exciting world. Author

Thanks for your comment GeneralHowitzer.


aquaseaCreative 7 years ago

Really important topic. I really didn't understand about money until well into adulthood.


travelespresso profile image

travelespresso 7 years ago from Somewhere in this exciting world. Author

It sure is an important topic and you are definitely not on your own on this one! Some people never learn or they rely on a partner to sort it out and or provide.

Thanks for stopping by and commenting.


LRobbins profile image

LRobbins 7 years ago from Germany

Very informative hub! I think it's such an important topic and I really like the practical steps for different ages.


travelespresso profile image

travelespresso 7 years ago from Somewhere in this exciting world. Author

Thank you for your lovely words.


ainehannah profile image

ainehannah 7 years ago from Dublin

It really is a lovely Hub Travelespresso! Very informative but warm too. Thanks.


travelespresso profile image

travelespresso 7 years ago from Somewhere in this exciting world. Author

Thank you for your lovely words ainehannah. Thanks for stopping by and for commenting.


prasetio30 profile image

prasetio30 6 years ago from malang-indonesia

this is wonderful hub. I also write about teaching children in saving money. You have complete hub. I give my big appreciate for you. I hope we all learn from this hub. This is small investment for us. But we can get the result in the future. Thanks


travelespresso profile image

travelespresso 6 years ago from Somewhere in this exciting world. Author

I am glad you found this hub helpful prasetio. If you're able to use the tips for helping children to get into good money habits it will help to set them up for the future. Thanks for leaving a comment of your appreciation.


Eileen Hughes profile image

Eileen Hughes 6 years ago from Northam Western Australia

Great hub, sadly parents do not train or teach their children the value of money from an early age. I also wrote an article on this.

You have hit the nail on the head with this hub thanks for sharing


travelespresso profile image

travelespresso 6 years ago from Somewhere in this exciting world. Author

Hello Eileen...thanks for saying that I have "hit the nail on the head" with this article. It's true that money skills need to be taught.


Georgia Mary 6 years ago

We're not taught how to Manage our Money or Value our Money as a kid but now it's not too late for us to Guide our next generation How to Manage our Money Effectively. Thank you Travelespresso for sharing such an informative hub. I'm to share with my friends and folks. You are great!


travelespresso profile image

travelespresso 6 years ago from Somewhere in this exciting world. Author

So true GM. We need to pass on this knowledge to our children. Thanks so much for sharing my hub and for your comment.


edmondpogi profile image

edmondpogi 6 years ago

saving is the best way to earn.


celeBritys4africA profile image

celeBritys4africA 5 years ago from Las Vegas, NV

Great tips. I hit the awesome button.


travelespresso profile image

travelespresso 5 years ago from Somewhere in this exciting world. Author

Thanks so much for the great feedback! Glad you enjoyed reading this article.

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