Teach children about money

How to teach your children about money

Do you want your children to be financially independent? Well, the first thing you need to do is to start talking about money with them.

You can not expect your children to be financially independent is they don't even understand money. Conversation is the first step.

teaching kids about money, teaching kids money, money and kids, teach kids about money,

Parents cripple their kids by shielding them

teaching kids about money, teaching kids money, money and kids, teach kids about money,

Some of the strongest people in the world lived through difficulties. When things come easy, you never learn how to react to things becoming difficult. Unfortunately, over the last few decades, parents (and society) have been crippling there children. Our children have more exposure to sex education than money management. While we are providing our children an enjoyable life for their first 20 or so years, we have been setting them up to fail over their next 75.

If you have never heard the story of the man who crippled the Emperor Beatle while trying to help it out of its cocoon, I would recommend you Google it. To sum it up; the butterfly can only develop wings strong enough to fly if it struggles to squeeze itself out of its cocoon. While the man easies the journey for the butterfly by increasing the size of the hole in the cocoon, he cripples the butterfly by eliminating the struggle that strengthens its wings. The story / lesson frame the issue: many times when we want to help we actually hurt.

teaching kids about money, teaching kids money, money and kids, teach kids about money,

At what age should children start learning about money?

teaching kids about money, teaching kids money, money and kids, teach kids about money,

Many parents think that a 5 year old is too young for money conversations. However, these same parents don’t realize that the 5 year old see them buying things with money. The 5 year old sees them using the ATM to get money. What the 5 year doesn't know is that the ATM doesn’t have money. The ATM only holds mommy and daddy’s money. The money came from working and mommy and daddy save their money in a bank. They haven't explained to the 5 year old that the ATM is just a way to get to the money they are saving.

teaching kids about money, teaching kids money, money and kids, teach kids about money,

You can not start early enough when it comes to talking about money with your children. It doesn’t have to be uncomfortable. The key is to educate them that money is a necessity of life, like eating and bathing.

Ways to begin exposing children to money

teaching kids about money, teaching kids money, money and kids, teach kids about money,

Take your children to the bank with you
One way to work an understanding of money into life is to take your child with you when you go to the bank when you make deposits or cash checks. Explain to your child what you are doing at the bank and why you’re doing it. This is a perfect time to begin explain the concept of saving. Even if you are currently unable to save, you can explain that the concept. Tell your child that when earn money, you put it in a bank until you need it. Depending on your child’s age, and comprehension level, you might explain that some of the money will be used later to buy food, school clothes and toys while the rest goes in a special place to be safe. This money in the “safe” place will be used by mommy and daddy to by foods and cloths when they are older and no longer work.

teaching kids about money, teaching kids money, money and kids, teach kids about money,

Have them sit with you when you pay bills
Another way to expose your children to the realities of life and money is to have them sit with you when you are paying bills. It seems as if paying bills is a topic that most children are shielded from. Majority of the children today associate money with buying things. Very few relate making money to pay bills. When you hide the fact that majority of our money goes towards paying bills, children fail to learn how to balance what they want with what they have to do.

teaching kids about money, teaching kids money, money and kids, teach kids about money,

Give them a calculator and let them add up the price tags on things

When you take you child back to school shopping they see you sending money on items for them. Rarely does the child grasp the total. When you get home, pull out the items you purchased and let them add up the price tags. When they finish, they will see how much money was spent in total. This helps the child begin to respect how much things cost.

Visit our Site Map

teaching kids about money, teaching kids money, money and kids, teach kids about money,

Allowances are great for teaching children about saving.

teaching kids about money, teaching kids money, money and kids, teach kids about money,

When it comes to allowances, we recommend taking to you child first. Too many parents just tell their children that they will pay them an allowance if they do a few choirs around the home. The main point of an allowance is to begin teaching how to save. There should be a conversation about this rather than forcing them to save after they have earned their money.

Begin by talking to your children about whether or not they would like to have money. If they say yes, then you can begin to venture into the realm of allowances. If they say no, then start having a dialog with them about how the sticks of gum, the comic books and toy dolls all cost money. You can continue to explain that when they have their own money, they would have the power to spend it on the item(s) they choose (after putting a portion away in that special safe place).

It is up to each family to determine what an allowance is for. Some families tie an allowance to daily or weekly chores, while other families like to have choirs an automatic requirement of being part of the family and not link them an allowance. In this scenario, the allowance would be a payment for extra stuff that is outside of the normally expected choirs. Examples could be washing the car, or cleaning the garage. teaching kids about money, teaching kids money, money and kids, teach kids about money,

Remember, what we really want to teach is the concept that money is required to buy stuff today AND to protect them in the future. If we put some of the allowance in a safe place, they will be able to buy stuff even if they stop earning an allowance.

teaching kids about money, teaching kids money, money and kids, teach kids about money,

Children under 8 years old

teaching kids about money, teaching kids money, money and kids, teach kids about money,

For children under the age of 8 we recommend using a shoe box and a piggy bank. Each allowance pay day, praise your child for their good work. Attempt to make earning money fun. Then explain that the shoe box is where you put your money until you want it, like mommy going to the bank. Then bring out the piggy bank and explain that this will be the special safe place for a portion of their allowance. This piggy bank will protect some of their allowance so that it will be there in the future. Then take 20% of their allowance and have the child put it in the piggy bank FIRST. Explain that you always save the “safe money” first. Then put the rest in the shoe box. Tell your child that the next we go shopping, you will bring some of this money from the shoe box in case they see something they like.

teaching kids about money, teaching kids money, money and kids, teach kids about money,

Children over 8 years of age

Children usually can begin to understand banks by the time they reach 8. We recommend taking you child to the bank and opening a savings account. Take the money from the piggy back and deposit it in the bank. Many children at this age also have a lot of money in their shoe box. Once money becomes part of their life, they tend to hoard every penny they touch. You may want to talk to your child about taking some of the shoe box money and putting it in their new safe place: the bank. Make sure you leave enough money in the shoe box to cover the cost of them buying something when shopping. You never want to go and withdraw money from their bank savings. You are attempting to create habits that they will use the rest of their lives.

When pay day arrives, we like to transfer 20% of their allowance directly from our checking to their savings online. We let them click to proceed button so that they have a since of putting the money in their safe place. We then pay them cash the remaining 80%.

teaching kids about money, teaching kids money, money and kids, teach kids about money,