How to Teach the Value of Money to Children

Imagine how much better off you’d be if your children were savers and not spenders.

Imagine how happy you’d feel when you saw them happily adding money to their piggy bank instead of withdrawing money from your wallet.

Would you feel more at peace knowing that your children did waste your hard earned dollars on frivolous items they don’t need but instead used your money wisely?

As parents we teach our kids about values every day. Values are important because they direct our behavior. Values are what we believe in and what we aspire to have our children believe in too.

Values are ideas.

Values are thoughts.

Values are things.

The things that we value are treasured, respected and nurtured.

We teach our kids to value things like friendship, hard work, and even rest because those things are important to their overall wellbeing, but so is money.

Money is valuable because it can be exchanged for goods and services that enhance our lives.

Money buys us opportunities like additional training and education to get a better job or a ticket to network and meet people that can help us or support our goals in some way.

Money allows us to drive the cars we drive, live in places we live and pays for our everyday living expenses.

Money makes living easier.

Teaching kids the value of money is important not only because of what it can do for their futures but also what it can do for them today.

When we teach our children how to save money they learn how to set and achieve goals.

When we teach our children how to spend money properly they learn things like how to shop for deals and comparison shopping.

When children spend their own money they learn pride of ownership. They take care of things that they value.

Things that are valued are often not destroyed, misused or mishandled.

There is no question about it; money is valuable and teaching our kids about the value of money early is important.

Here are a few ways to teach your kids about money the value of money;

1. Give them an allowance or “paycheck”. Teach them that they have to work for money just like you. Assign age appropriate “work” or chores and attach a deadline to it. For example every week you are responsible for taking out the trash, making sure your bed is made every day and washing the car. At the end of the week evaluate their work like an employer. Give them their paycheck if you feel their work is acceptable.

2. Set up a savings account. Teach them that a portion of their earnings must be set aside for savings and/or investing. Take them to your local bank or credit union and open up a savings account in their name. If they are old enough, enroll them in online banking and teach them how to access their account online. Periodically as their account grows show them how they earn money by saving it.

3. Set up a spending account for them. Identify how much of their earning should be spent on their expenses. Yes, kids have expenses too. Expenses in our home for our kids include things like entertainment and extra-curricular activities that go beyond what we want to pay for. For example, one thing that we pay for is piano lessons and summer camp. If one of our kids want to add an extra basketball camp or go to an event outside of what we have already budgeted for the summer or school year then that will have to come from their earnings. Sometimes will pitch in for causes that we believe in, but other times we let them decide if it’s worth investing. This way if it’s something they are just doing because their friends are doing we haven’t loss any money.

By following the above strategies you can help your kids learn the value of money and help yourself in the long run too.