Teaching Kids about Money

Teaching Kids about Money

Written by Nathan Woolard

Children are by nature curious and observant, so remember that you are always teaching them, whether you intend to or not.  You set an example through your actions and your attitude, and the youngsters may absorb more than you expect.  With that in mind, make sure you’re keeping up your own good money management habits to pass on to them.  One way to emphasize these impromptu lessons is to simply think out loud.  Sometimes your body language might give off an incorrect impression of your actions, so talking out loud to clarify what you’re doing and why can help your kids follow along without confusion.  Here are a few suggestions for ways to use everyday activities to show your kids how you think about money:  

·         Paying monthly bills can be an unpleasant chore.  If your children see that you are grumpy or irritated while doing it, they might feel that bill paying is something they want to avoid.  Use this time to explain to them that the water we use for drinking and bathing, the electricity that powers our lights, televisions, and computers, and the gas that heats our homes all needs to be paid for.  So, paying those bills is an important task.

·         The personal value of an object or experience doesn’t always equate to monetary value.  Discuss with your kids how some fun things cost money, like ice cream and clothes, while others are free, like playing with friends or visiting the library.

·         Let your children see the choices that come with spending money.  When you’re out shopping together, point out that items like food and clothes are essentials and are part of your allowed budget.  Talk about the decisions you make, like why it’s important to buy fruit and milk instead of candy and soda when your budget doesn’t allow for all of it.

·         It can be hard to teach the importance of saving to a child, so look for opportunities to stress that some things are worth waiting for.  For instance, maybe your family wants to take a vacation to Disney World.  Talk to your children about how much you need to save and how long it will take to save it.  Then give them a jar for savings and encourage them to start storing up their own money to buy a nice treat or toy they really want.

·         Include your children in decisions that will have a financial impact on your family.  For example, getting a pet is certainly fun and exciting, but it can also be an exercise in financial responsibility.  Younger children can help make a list of items the pet might need.  Then you can discuss with them which items are essential and would need to be budgeted for, and which items would be extras and need to be saved for.  Older children can help research options for pet food, allowing them to weigh factors like nutrition against cost and also compare prices from different stores to find the best place to buy from. 

·         Make the most out of reading time with your kids by choosing books that help teach them about money.  Pick out options that educate and entertain, like The Berenstain Bears’ Trouble with Money by Stan and Jan Berenstain and Curious George Saves His Pennies by Margaret and H.A. Rey.  For other useful suggestions, check out this extensive book list provided by the Consumer Financial Protection Bureau at https://www.consumerfinance.gov/consumer-tools/money-as-you-grow/bookshelf/.  Included with the list are downloadable reading guides which share tips, questions, and activities to go along with each book.

Financial matters may not seem like a particularly exciting topic to broach with your children, but there are plenty of ways to make a necessary discussion more fun and engaging.  In the end, the most important thing is to simply let your kids see, and hear, how you handle your money.  Just be open about your spending and saving practices and your routine will gradually rub off on them.  The best way to teach is through example!