I personally don’t have kids (yet, who knows what the future holds ). However, if I did have them or when I do have them, you can guarantee that I’ll be teaching them about money as early as I possibly can. We live in a society that doesn’t promote financial education at an early age, so it’s up to the adults to help close that knowledge gap.
It can be hard to teach your kids about money, especially if you were never taught or don’t have the best handle on your own finances. That doesn’t mean you shouldn’t try! Keep reading for 6 easy ways to teach your kids about money.
6 Easy Ways to Teach Your Kids About Money
#1 Get them money books
Did you know there are money books for kids of all ages?! Yep, that’s right! Not only does reading to your children help them grow up to love reading, but reading to them about money can help establish the foundations they need for long-term financial success. If your child is still young and you’ll be doing the reading, consider a money book like “The Four Money Bears.”
If your child can read on their own, but they aren’t in teenage years yet, try a money book like “How to Turn $100 into $1,000,000: Earn! Save! Invest!” Lastly, if your child is in his or her teenage years, a money book like “O.M.G.: Official Money Guide for Teenagers” is a great option.
Getting your children hooked on money books as early as possible opens their minds to the financial principles they’ll need as adults. They can start implementing positive money habits as soon as they have money coming into their hands!
#2 Go old fashioned with a piggy bank
Young children are very impressionable. This can work to your advantage if you’re trying to teach them about money at an early age. A great way to get them familiar with the principles of saving money is with a piggy bank. I had a handful of piggy banks as a child. I had the standard pink piggy bank, and piggy banks that resembled Disney characters.
If you can find a piggy bank that resembles your child’s favorite characters, it will make the process of picking out the piggy bank fun. It will also make the process of adding coins and dollars to the piggy bank exciting. This will help associate happiness with saving money for your child that can have a positive impact on them in adulthood.
#3 Set them up with a minor’s bank account
Another way to teach your kids about money is to get them set up with their first savings account. My mom took me and my brother (I was 8 and he was 5) to the bank to deposit our piggy bank change into new savings accounts. I still remember that experience and it was exciting for me to have something adults had!
After the account is set up, you can make it a point to deposit a portion of any allowance or money earned into the account on a regular basis. Use each deposit as an opportunity to share how saving money (and not touching it) allows the balance to keep growing.
On another note – there are checking accounts for kids as well, and they come with debit cards. If your child is a little older, this could be a good way to help them get accustomed to banking. It can also help you keep your eyes on what they’re doing.
#4 Have them track any money or allowance earned
One of the best money management practices a person can do is track their spending and income. Imagine if you started this habit as a child! Get a themed notebook for your child and have them start tracking any money or allowance earned. This will help them see that earning money can add up.
If you want to take it a step further, also have them track any money they spend. Whether they pull it from their piggy bank or bank account, tracking their spending can show them how quickly their hard-earned money can disappear if they don’t keep their spending in check. That lesson can help your child avoid over-spending as an adult.
#5 Explain your rationale for buying (or not buying) things when they ask
Another easy way to teach your kids about money is by explaining your reasoning for why you buy or don’t buy something for them. I urge you to be cautious here – sayings like “money doesn’t grow on trees” can lead to children hoarding money as adults. Instead, share why you’re buying the item because you’ve hit other savings or income goals.
If you’re choosing not to buy an item, explain why. Let them know that purchasing this item will mean that another goal purchase doesn’t get made. Explaining that the goal purchase that doesn’t get made is more important than the current purchase in question.
Explaining your rationale for spending or not spending money can help set the precedent for how your child thinks about spending/not spending. Use this as an opportunity to get the right points across, so they can be instilled early on.
#6 Celebrate savings milestones with them
My final tip for teaching your kids about money is to celebrate savings milestones with them. This can be milestones they hit, or milestones you hit! Recognizing your accomplishments is a great way to stay motivated as you work towards new goals. Show your child early that celebrating the wins is a reward for hitting goals will make them want to reach more goals.
I encourage you to celebrate your own milestones and include your children in the celebration. Explain why you’re celebrating and what the next goal is. Get them familiar with setting goals, thinking about goals, and working towards savings goals.
Related: What It Means to Be Financially Literate
Simple money principles practiced early on can help set your children up for success with their own money. The tips above can help you get your feet wet in the financial-education pool for your kids! Do you have any tips on how to teach kids about money? What was your experience learning about money as a child? Share your advice and experiences below!