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Teaching kids about finances 2016

Updated on March 17, 2016
Kids and finances
Kids and finances

Some adults fall into hard financial times and have a lot of debt because they were not properly taught how to save money and to manage finances when they were children.

Kids should start learning about money and finances at a young age. This will probably discourage the "I want this, I want that..." begging behavior parents constantly hear, and hopefully prevent outlandish spending habits as an adult.

Here is some important financial advise to teach your children starting at a young age, so they will become more financially savvy adults when they are handling, earning, and saving their own money.

My advice is for parents of every income level - regardless of race, education, employment, background, location, and financial status.


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Overview of Hub

Some adults fall unto hard times and have a lot of debt because they were not properly taught how to save and how to manage finances. Here is some important financial advise to teach your children starting at a young age, so they will become more financially savvy adults when they are handling, earning, and saving their own money.

Also, please refer to my other Hubs on saving money:

Fear of (Managing) Money - written for adults and teens

Lending money to family and friends

Teaching children to save in 2011

(1) At a young age, get your child a piggy bank. Teach your child what a dollar (or pound) is, and explain the value of each coin. Add some money to your child's piggy bank.

Teaching children to save in 2011 (Part 2)

(2) When your child is old enough to read and understand numbers, open up a savings account with your child. Explain to your child that this is their very own account, and teach them about saving money. Many adults use online banking, but I would suggest using an "old fashioned" bank book or check register, and help them write in their deposits, and show them how much they are saving.

  • Some banks have kids clubs, and may offer a free incentive, or toy, for joining.

(3) Get your child their very own calculator. Teach your children how to add their deposits to their current saving account balance.

(4) Actually go to the bank with your child. Many adults have direct deposit, online banking, mail in deposits, and may hardly ever visit a bank! Even when you child only has one or two dollars to deposit, make a special visit to the bank (when you are out with your child or doing errands anyway), and help your child make the deposit and reiterate the importance of saving.

(5) Equate an allowance with the accomplishment of a chore. Instead of just giving your kids money, teach your kids to earn money. This can simply be cleaning their room, helping with the dishes after dinner, vacuuming, or whatever household chore your children can be trusted with.

(6) Teach children to save some money they receive from gifts. Parents decide how money given to a small child from Grandma or Grandpa, or other relatives, is spent. As your child gets older and starts to understand what money is, teach them to save some and spend some on themselves for a present.

  • For example, let's say your child receives $30 for their birthday. Teach them to save $10 in their savings account, and $20 can be spent on books or a toy.

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(7) Explain that money does not grow on trees. Explain to your children that you make a limited amount of money, and then bills needs to be paid - utilities, food, car expenses, mortgage or rent, school supplies, and clothes. Do not burden them or overwhelm them with the numbers (they are still kids, after all), but an explanation about family finances teaches them that parents do not have an endless supply of money. Teach your kids that lights need to be turned off when they are not using them because electricity costs money $$$, is a valuable lesson.

Teaching your teenagers about money

Teaching teenagers to save

(1) It is important to teach teenagers how to economize at home. You can start by teaching your teenagers about coupons and explain to them about the economy. A discussion on the high price of gas will inform your child why they cannot borrow the car and take a two hour joy ride.

(2) Encourage your teen to get a part time job, and start saving for their future. Instead of playing video games for hours on end on the weekend, they can start working and start saving for college.

Take Aways

If children understand finances and the value of saving money at an early age, they will most likely avoid debt and financial hardship as an adult. As parents, it is important to find the time to teach your children how to be frugal and save at an early age, and how to spend money wisely.

Teaching your kids about family finances and your perspective of money will help them to be responsible, aware of the value of money, and instill in them lifelong lessons of planning and saving.

Please send your children into this world as financially fit and savvy adults. $$$

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    • MarloByDesign profile imageAUTHOR

      MarloByDesign 

      7 years ago from United States

      Nell Rose, I love it...a pink piggy bank works! Absolutely, chores are a fantastic way to learn the value of earning money.

      Being broke in life will affect your outlook on life and the ability to enjoy life - great point!

    • Nell Rose profile image

      Nell Rose 

      7 years ago from England

      Hi, this is very important, I remember when I was young, we always had to do chores to earn pocket money, and we had a little pink piggy bank too! in these days of hardship children have to learn the value early on or else live a life of being broke, thanks

    • Traqqer profile image

      Traqqer 

      8 years ago from Atlanta, GA

      Yes, it's never too early to start. I have two kids that I am currently teaching the value of money to. They will thank me for it later.

    • profile image

      the insurance guy 

      10 years ago from Midwest

      I'm constantly amazed at how many folks don't have a clue how to make money. So many don't even have a concept of what it takes to actually produce a dollar. It's so important that kids be given the chance to learn about finances at an early age and to put that knowledge into practice as you've outllined. Great information for those who really want to help their kids get a leg up on real world issues! Thanks!

    • MarloByDesign profile imageAUTHOR

      MarloByDesign 

      10 years ago from United States

      Thanks for you comment, 2patricias. It is nice to read a real life experience where this idea has worked for a parent. Hopefully, you are instilling in your children the value of money at an early age, and they will remember what you taught them and be better money managers as adults.

    • 2patricias profile image

      2patricias 

      10 years ago from Sussex by the Sea

      This is so important. We only gave our kids weekly pocket money if they had tidied their bedrooms. When they became teenages, a clothing allowance (not school uniform or basic clothing) was linked to them doing their own washing. This worked brilliantly with minimal arguments as they knew we just didn't pay up until the jobs were done so there was no point in rowing about it. We also paid extra for other jobs over and above the couple of basic tasks e.g. dishwasher emptying we expected as a family contribution. This worked really well and they are both fine with money as adults.

    • MarloByDesign profile imageAUTHOR

      MarloByDesign 

      10 years ago from United States

      stephhicks68, thank you - that means a lot coming from you (93 hubs published, almost 100!). I wrote this hub based on personal experiences - and interviews I have conducted - and asked people who were good with their money and finances, how their parents taught them as a child.

      Teaching your children at a young age truly pays off in the long run! Thanks for reading my hub.

    • stephhicks68 profile image

      Stephanie Hicks 

      10 years ago from Bend, Oregon

      Marlobydesign - this is super! I considered writing an article like this too, and you certainly covered all the bases, and more! An excellent article for parents.

    • MarloByDesign profile imageAUTHOR

      MarloByDesign 

      10 years ago from United States

      ruminator, you make an excellent point! You can teach your kids all you can about the value of saving money, but as adults, they need to manage their money on their own.

    • ruminator profile image

      ruminator 

      10 years ago from Big Skies, NM

      I think financial success is somewhat a karmic thing. Teaching is essential, but the carry-through is definitely a personal matter. Thanks - this was great!

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