Teaching Children About Fun Finance
Make learning about Finance FUN!
Teaching about money
Teach them the importance of finance now
When I was a child I never really was aware of the household finances. I never learned about credit cards, bank accounts, or what a mortgage was. Looking back I think if I had an early introduction to these things I would have had an easier time handling my own finances.
I don't think there is a specific time to begin these lessons but I do think that the sooner you begin the better! So how to begin this process of teaching your children about money and finances? Here's a few starter tips!
Have Children Earn an Allowance
A mistake that is often made is to give children an allowance for doing nothing. Just handing money you worked for to your child sends a bad message. However, if you have chores for the children to complete in order to get the allowance then they can begin learning that you must earn money by working.
How can children help with household chores? Simple chores like making the bed or folding laundry can be given to younger children. Just be prepared for your towels to be folded differently than you like until they improve their skills. Do not take over and tell them they aren't doing it right, this will make them not want to help anymore!
For older children you can reserve the more involved chores. These could include mowing the lawn, taking the trash out, washing the car and doing the dishes. Again, allow for a learning curve while they learn how to do their new task. Letting children accomplish their own chores to earn an allowance builds confidence and creates a solid foundation for good work ethics!
Have Children Learn About Saving Money
Saving is something that I used to struggle with, I always needed to spend everything I had or having money felt silly. When I reached middle school I actually had a finance class that taught me about compound interest and retirement savings. That was my eureka moment, when I knew money could be spent but you had to set something aside for the future. So when teaching children about saving keep my experiences in mind, you can teach them about saving but there are some youngsters that won't get the whole picture until later.
When children are young, allow them to pick how much they are setting aside for saving. The idea here is to allow them control over their finances and to not make it a negative experience by making them meet your demands. Have them set a goal to save for. Do they really want that fabulous new version of Tickle Me Elmo? Or maybe the newest reincarnation of Strawberry Shortcake? Let them save up and buy it themselves.
As children get older you can up the ante with the use of a savings account. Any income they have should have 10% taken and put into a savings account. If they have an account already set up this can be done by have direct deposit handle the distribution for them. Just be sure to talk to them about it and explain that they are old enough to begin saving more responsibly. It's amazing how fast that 10% a paycheck adds up, it's an incredible reinforcement for responsible saving habits!
Another way to get older children to save and be mindful of a budget is to make them responsible for their own expenses. I bought my own car, paid for my own gas, and paid for any upkeep on the car. Your child doesn't need the latest hotrod, the thrill of driving doesn't die if they drive a beater car. I started saving for my car with my babysitting money and when I turned 16 we went and bought a lightly used Sunday drive car for $500. That car drove me everywhere in high school and survived through my first year of college. During those years I saved money to buy my next car, brand new! It's a feeling worth experiencing and I hope your children get to enjoy excitement of saving for a goal as much as I do!