Teaching kids about money
How should we be teaching our kids about money? This is a favorite question of mine. I have two young kids, and I am constantly thinking up ways to teach them how to be a good steward. I wish they still taught financial literacy skills in public school. Since it’s not a part of the curriculum anymore, it’s more important than ever for us parents, aunties, uncles and grandparents to pass on our knowledge to our kids.
Help kids learn the value of money. Stop buying everything they ask for! We live in a time where adults have more disposable income than ever before in history. We spoil ourselves and we spoil our kids. I know, I've spoiled my kids rotten. Kids will never know the true value of an item unless they feel it for themselves. If they want a toy, for example, let them save up money for the item and purchase it themselves.
Help kids earn money. Either set up a chore system or help them start a lemonade stand. The satisfaction of earning a dollar is one of the best feelings of accomplishment for adults. Let's show our kids how to earn that satisfaction as well.
Help kids spend money. Start lessons of good financial stewardship early on in life. Teach them how much to save and why they should save. Teach them how much to spend and what they should spend it on. Teach them how much to share and why they should share. We use a "moonjar" in our home. It's an envelope system that allows the kids to "Save", "Spend" or "Share" each deposit they make. They set goals for each bucket of money, and every deposit (whether it's from a birthday gift, chores or selling their used toys) has to be divided up among the three buckets. Sometimes more gets put into the "Share", sometimes less gets put into the "Share". It just depends on their goals.
Talk about money. American culture shys away from family discussion about finances. Grandparents and parents tend to not talk about money. But if we are to teach our kids about money, we need to discuss it openly and regularly. Tell your kids why you aren't buying the fancy brand cereal at the grocery store. Tell your kids that you are saving for a family vacation and therefore aren't going to buy a new pair of shoes. They will learn their habits and attitude toward money from their parents! Are you a good role model? It's not too late to get started now. Tell them your good and bad experiences. They will be forever grateful!
