Being able to make good financial decisions doesn’t just happen. We have to teach our children the value of money and do so in ways appropriate to their ages. It’s never too early to get these lessons started, especially nowadays. Since marketers have begun aiming ads at children with every media channel, they must understand that certain purchases aren’t worth the investment. If you don’t teach your children how to manage money, someone else surely will. But that isn’t a risk you want to take. With that in mind, here are ten smart ways to teach children about money.
Play Classic Board Games
Many classic board games are more educational than most people realize. Rather than just teaching board game etiquette, Monopoly introduces children to important life skills, like saving for retirement and purchasing real estate. Playing these games as a family gives you a chance to explain to your children how the rules of the game apply in real life. Other childhood games, like house and grocery store, also teach kids about finances, along with cooking and cleaning.
Write Letters To Santa
Once the weather turns frosty, children get excited for Christmas. They want to decorate the house, make gingerbread houses, and, most importantly, write letters to Santa. Although this is a fun annual activity, it could be an educational experience too. Rather than letting your children ask for whatever they want, give them a spending limit. Having a spending limit makes your kids consider what gifts are really important to them. This is a great opportunity to practice math too.
Make Them Earn Money
Although Christmas is a time for giving, that rule doesn’t apply for the rest of the year. Instead of handing over money whenever your children ask for it, you should make them earn it. Depending on their ages, there are a few ways to do this. Teenagers can take on summer jobs, while younger children carry out chores at home. Entrepreneurship is another option to consider. Even a lemonade stand throughout the summer is a business, so teaches many important lessons.
Chat With Financial Experts
A financial adviser is an important resource, both for adults and children. Taking your kids with you the next time you speak to money experts gives them a chance to ask questions. If you have a living trust set up for your children, allow them to meet your living trust attorney too. At this meeting, you can explain what a living trust is and under what circumstances your child would be given money from it. Having these meetings now will make financial experts seem less scary.
Open A Savings Account
After meeting with your financial adviser, you might decide to open a savings account for your child. When you do so, make sure that you take them to the meeting. Explain exactly what a savings account is, how interest works, and how to access that money. If your child has earned their own money, ask if they would like to invest that into their savings. Once your child is old enough, you can open a checking account. This would give them greater control of their money.
Shop For Groceries Together
Certain chores take much longer with children in tow. Shopping for groceries certainly makes that list. However, that doesn’t mean that you should leave your little ones at home. After all, shopping is an important chore and life skill. Unless your children know how to shop smartly, they’ll waste money when they’re older. Before heading to the store, write a grocery list, make a budget, and gather coupons. Each of these tasks is important and helps with money management.
Download Money-Related Videos
Most parents are always trying and failing at limiting their child’s screen time. While you shouldn’t give up this battle entirely, you could be flexible. The internet doesn’t just waste time and can instead be incredibly educational. YouTube is a great example. Although there are many pointless videos on the platform, you can find a few that teach children about money. These are fun, interactive, and fairly short, which means your child could easily see one during a car ride.
Choose Different Bedtime Stories
Just like videos, books can be both fun and informational. When choosing your child’s bedtime story, pick a book that talks about money. There are hundreds out there that focus on different financial topics, including entrepreneurship, investing, and money trouble. If you don’t own any books about money, then head to your local library. Without having to spend a penny, you can take home a variety of books. Alternatively, you can download and listen to audiobooks.
Set A Good Example
Children learn by what they see. This means that, if they see you managing money well, they will understand that they must do the same. Unfortunately, the opposite is also true. Overspending, lying about money, and other bad financial habits can make your kids question your teachings. That is why you must set a good example for them. Make sure you also explain what you’re doing when using an ATM or writing a check to help your children learn basic money concepts.
Leave Room For Mistakes
Part of allowing your kids control of their money is letting them make mistakes. While you can explain to someone the consequences of bad money management, they’ll never truly understand them until faced with them. While it’s tempting to step in and steer children away from costly errors, doing so could hold them back. A mistake might seem disastrous to them now, but the lessons they learn from it would benefit them later and keep them from making a bigger blunder.
Money is a topic many children think very little about. With parents buying everything they need, kids usually assume that money comes easily. Teaching your children the value of money will not only benefit them in the future but help you now. Once a child knows that things cost, they usually become less demanding. Hopefully, the tips above help you teach your kids about money.