How to Teach Kids About Money - 10 Fun Tips
One of the challenges many parents face is teaching kids about money. Some are even scared to start a conversation involving money with their kids. However, imparting this piece of knowledge is very essential to children. By doing this, you are teaching your kids to be good decision makers and become responsible adults.
Teaching kids about money is not as daunting a task as you think. It can even be fun - a lot of fun, in fact. Remember, the sooner you teach your child about money, the better. To help you start with educating your child about money management, here are simple ways on how to teach kids about money.
10 Fun Ways to Teach Kids About Money
1. Play games.
Kids love games. You can use this to your advantage by playing board games with your kids which involve money. You can try out Monopoly, Thrive Time and Beat Debt. This is a sure fun way to teach kids about money.
2. Involve your kids.
Your weekly trip to the grocery store is a great opportunity to teach your kids about money. You can tell your kids what your budget is and let them help you buy things under that set amount. If your child is old enough, you can give him the calculator and let him do the calculations. This is a great way to teach your kids about money on a more consistent basis.
3. Give them allowance.
Experience is the best teacher. Make sure that you let your kids experience money. Also let them understand that money is hard-earned. You can reward your kids whenever they finish a chore or get high grades in school. Make it a point that you give money in denominations that encourage saving. This means that instead of giving $5, give 5 1-dollar bills.
4. Teach the value of saving.
When your kids already have money on their hands, they may tend to think of using all of it to purchase their favorite foods and toys. While rewarding themselves for the money they have earned is important, it is better to teach your kids that part of their allowance should always be kept as savings. Introduce to them the good old piggy bank. Experts also suggest giving your kids three different containers for their money – one for saving, one for spending, and one for donating. Remember to guide your kids on how to divide their allowance amongst the containers.
5. Open a savings account.
The next time you go to the bank, take your child with you and open her own savings account. Explain to her that leaving money in the bank makes it grow through interest. This is also a great way to let your child learn about the basics of banking.
6. Teach your kids how to evaluate advertisements.
Kids easily give in to the advertisements they see everywhere. Even adults often fall prey to advertisements for products. It is important to teach your kids that not all they see on TV and print ads are worth spending their money on. Teach them how to evaluate products first before buying. Also tell them that there may be alternatives which offer the same quality but at a cheaper price.
7. Explain ATM and credit cards.
Kids might think that money just comes from a machine and that you can pay your bills just by using a card. Explain to them that ATM is like their piggy banks; you are taking money from your own account and that you worked hard for that money. Emphasize that it is not free money. When paying with a credit card, explain to them how credit cards work. Credit cards can be very troublesome if used incorrectly so remind your child that using a credit card for all their purchases is not a wise idea.
8. Allow them to make decisions.
It can be frustrating when your kids do not follow your advice. But it is important to let them set their own financial goals and make decisions by themselves. Sometimes, committing mistakes is the key to understanding financial concepts. As parents, just remember to be there to guide them always.
9. Be a role model.
As parents, you should always lead by example. When you make wise decisions, your kids emulate you. Make sure that you do all of the things you teach to them. Always be reasonable with your purchases.
10. Teach generosity.
Remind your kids that money is not everything in this world. Sharing their blessings to less fortunate people is important. You can also teach them to donate to charities and churches. Teach them about frugality and to appreciate what they have. Perhaps this is the best lesson you could give when you teach your kids about money.