If you think back to your childhood and imagine the one thing you wish you had been taught as a kid, I’m going to bet that money management is going to come up near the top of the list.
After the “birds and the bees” talk, this can be one of the toughest things to explain to your kids. The hardest part about teaching money skills to kids, I think, is taking the extra time and effort out of our already busy schedule to talk to them and show them things about it while also being consistent with it. (Consistency is one of those things that we all have to work on, but when it comes to money that’s especially true.)
If money management skills are something you haven’t already started, it can be done with three really super simple things.
1. Play Money
One of the very first things we did when the kids were around four and six was we started playing the Monopoly board game with them. There are lots of variations on Monopoly right now, including some specifically made for little kids, but the core concept is always the same.
It introduces the concept of collecting money and buying “houses” as well as having to pay rent. This makes learning about money fun and competitive. Nowadays, there are plenty of board games that make learning about money fun and easy, including one called Act Your Wage from money guru Dave Ramsey.
2. Piggy Banks
Another thing we did early on was to buy the kids their own set of piggy banks. Like with any new “toys,” they loved them and couldn’t wait to start putting money into them.
We had “Spend, Save, and Give” banks and explained to them what each was for. The spend and save banks are pretty obvious. It’s important for your kids to decide how much of their money they want to spend and how much they want to save and to see that their decisions with money have consequences.
But the “Give” bank is also important because it encourages your child to set aside money to share with charity groups. There are a lot of different piggy banks you can buy out there, or you can make this a little more personalized by having them create their own.
3. Chore Chart
Finally, we started a chore chart where our kids are able to earn $0.25 for each chore they complete. Now, we aren’t talking about paying them that much for cutting the grass or weed-eating the flower-beds. These are simple things that I knew they were capable of doing like picking up their toys and putting away clutter.
At the end of the day, it was very exciting for them to receive the quarters and then put them into their piggy banks. This teaches them that money isn’t something you are given, but rather something you have to earn.
Getting the Process Started Is Important
The most important thing, though, is to just start. The younger you begin, the better, so they get used to it and understand that “parents aren’t made out of money” and “money really does not grow on trees.”
More Tools and Tips for Teaching Money
We have a few links that may help you to get started teaching money principles to your children: