The holiday shopping season is a perfect time to start thinking about teaching children practical money skills: responsible spending, budgeting, buying choices, and money management. These are valuable skills not only for the holidays but all year long. By laying a foundation for wise money management now, we set our children up for life.
11 Tips for Teaching Kids About Money
💵 Switch to Cash
Cash is a much more hands-on way for children to understand money. They can help count out money at the store, grab the exact amount budgeted, count change, and more. Study after study has also shown that people spend less when using cash, so it will help your family save money too.
💵 Teach Value Early
With ShillerLearning's materials, even young children begin to grasp the concept of money. We make it hands-on, fun, and easy to teach. Children enjoy playing store and parents appreciate that real learning is happening at the same time.
💵 Set a Budget Together
Working on the budget as a family is a powerful way to teach children about money. While you may not want to share every detail of your finances, involve them where you can. They could help set the grocery budget or plan the budget for your next family vacation.
💵 Let Them Take the Lead
One approach that works beautifully: give children a set birthday party budget and let them make all the decisions. Parents are available to help with pricing research, but the child handles the final choices, purchases, and staying within budget. Each year the budget grows along with the responsibility. Children who manage their own party budget develop a remarkable sense of pride and gain real, practical money skills in the process.
💵 Help Them Reach Their Big Goal
Have you heard of the Big Hairy Audacious Goal, or BHAG? If you have a young entrepreneur who wants to start a business, help them reach their dreams. Even if they bring in only a small amount at first, the financial confidence and skills they will gain are invaluable.
💵 Teach Through Play
Play is the most powerful teaching tool for young children. Teaching money concepts through play helps lessons stick for life. Children love to play with money. Give them plenty of opportunities to play store, bank, budget-setting, and other real-world money scenarios.
💵 Allow Freedom Within Limits
When children earn money, allow them to decide what to do with it, within clear boundaries. Some families divide money into categories such as Save, Share, Spend, College, and Activities. Others allow children to spend freely without parental approval. Some parents prefer to review purchases first. Set clear limits that reflect your family values and let children make independent choices within those values.
💵 Consider a Teen Financial Program
There are excellent financial management programs available for teenagers. If teens head off to college with solid financial knowledge, they are far better prepared to manage on their own and avoid the financial pitfalls that catch many young adults off guard.
💵 Teach the Value of Work
Offer extra jobs around the house or give children a chance to help neighbors or relatives. These should be tasks beyond their regular chores, things they choose to do in exchange for pay. If they want extra money, they can do the job.
💵 Have Open Conversations
Explain to your children how you make big money decisions. Share the process with them. Let them hear some of your thinking out loud. This builds a better understanding of how to weigh spending choices. When working through the ShillerLearning Language Arts lessons on principled thinking, include money topics in the discussion.
💵 Include Current Events
Share money-related news articles, videos, and TED Talks as a springboard for conversation. Connecting financial concepts to real-world events makes the lessons feel relevant and meaningful to children of all ages.
What are your tips for teaching children about money? Share them with us in the comments below.
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