Financial smarts is something that people learn through experience. Unfortunately, it does not come innate to many people, and the best thing that you can do for your children is to teach them about money at an early age. Of course, teaching them about money also means teaching them how to handle it properly and how to make savings as young as they are.
Teaching kids about money need not be a boring task – both for you and the children. Let me share some fun ways by which you can impart financial smarts to your kids.
1. Introduce the concept of money as soon as they can count.
At what age did you learn how to count? Different people will have different answers for sure, so the best thing to do is to grab the chance when it arises. Once your children learn how to count, start them off with money lessons. The lessons need not be complex or difficult – just make sure they understand the concept of money; how it is earned and how it can be spent. You can even do so with play money – there’s value in Monopoly after all!
2. Expose your children to books about saving money.
Love for reading is another value that we ought to impart to our children at an early age. This article is not about that, but let’s touch on it a bit. While you’re spending time buying books for your children and reading them together, why not get some money-oriented books as well? There are many children’s books that touch on the value of money and how it should be managed properly. I highly suggest getting several of these books and reading them to (or with) your children. Sometimes, the best lessons in life are learned via reading.
3. Teach your children how to set desirable money goals.
Setting goals is important in every aspect of life. Money is not an exception. If you expect your children to truly understand the value of money, you ought to help them set goals that are their own. Find out what they want to have in the near future and help them set these as goals. Once the goals have been set, you can then come up with a plan to achieve them. As these goals are your children’s, the plan should also be theirs. Remember that you are there to teach and encourage, not to dictate.
4. Open savings accounts for your children.
Part of achieving financial goals is to save money. As your children grow to be adults, they will realize the need for a savings account. Not everyone realizes this need, however, and you can only do your part by starting while they are young. Most banks have junior savings accounts, or savings accounts geared towards young children. Take advantage of this, and open an account for each of your children. Let them hold the pass book and make them accountable for their own accounts. This will instill a sense of responsibility in them – something that you cannot take away even as they grow older.
5. Make saving a game.
If you have several children, make savings a game. While we do not want our children to be over competitive, instilling a sense of competitiveness is always a good thing – just don’t overdo it. When setting savings goals, why not ask your kids to participate in a contest? For example, the child who accumulates a certain amount in his savings accounts first gets a reward. I am sure you can come up with other little games that you can involve your children in – this will only make saving more fun for them!
6. Involve everyone in the savings project.
Why not start a project for the whole family? Let us say that you’ve all wanted to go to this vacation destination for a long time. Why don’t you come up with a plan to save enough money to finally go on that vacation? When working on this plan, make sure that every person in the family has his own task. Break down your goals into smaller ones which each child can handle. In doing so, you teach the kids the value of saving towards a goal and you can all enjoy the benefits together.
7. Take the children to the bank for an educational trip.
Another idea is to take your child to the bank for a field trip of sorts. Most local banks will even accommodate you if you talk to the manager about your objective of teaching your children the value of money. This trip can be beneficial to the kids as they can see how money works in real life. While at the bank, you can explain to them the functions of the various people. You can even take them to the ATM and have them take money out on their own.
8. Give your children the chance to make some financial decisions.
Your children will have their ‘own’ money every now and then – birthday money, Christmas money, and so on. While saving this money is smart, you should not impose your will all the time. For sure, your children will have some ideas as to what to do with the money. Give them a little lee way and allow them to make decisions. Of course, you are still there to guide them and explain to them the various options that they have. Sometimes, even if your child makes the wrong decision, it can still be a learning experience.
9. Help your children make their own money.
Birthdays and holidays only come every so often. How can you help your children earn some money for themselves? Think of creative ways you can do this. One idea is to hold a family garage sale. Have each child go through his belongings. Ask them to weed out items that they think they can sell. You can help them with the pricing, and then give them all the proceeds later on. If they have to work to earn money, it will be easier for them to realize its value.
[…] This is a great way to get kids to clean up their rooms and declutter the house! Let them organize the garage sale, from getting the stuff together to posting signs around the neighborhood to entertaining the customers. The incentive? They can keep the proceeds to shop for new clothes for the upcoming school year! (This is also a great way to teach kids about the value of money.) […]