The day you realize your child or children have no concept of the value of money can be both jarring and eye opening. We all want to raise confident, empowered, educated, well prepared kids. But often times, our desire to give our kids the absolute best can lead to entitlement issues.
In reality, the best gift we can give our kids is an education in life. One of the most important life skills for any kid to learn is the value of money. It’s not always an easy concept, especially for young kids or kids who’ve already established a pattern of being given everything they ask for. But, it’s also never too late to start and reverse old patterns that didn’t serve your family well.
You might be wondering if it’s time to start talking to your kids about the value of money. If you’re wondering about it, I’m guessing you’re already beginning to see the signs below and that’s why it’s begun to weigh on you.
Here are 4 signs your kids need to learn the value of money
They say “I need” when it’s really a want.
Teaching our kids the difference between a want and a need can be so difficult. While it is tricky to explain to littles and sometimes confusing for them to work out in their minds, it is so important. If they think they “need” things that are very clearly wants, this is a major red flag.
They tell you to just put it on your credit card.
The first time I told my child we weren’t getting something because I didn’t have cash on me and he responded with, “That’s okay mom, just put it on your credit card”, I actually froze in my spot.
Kids see, hear, and absorb more than you might expect. Which means, they’re likely seeing and hearing ads for credit cards all over the place.
If you don’t show them your cards or talk to them about credit, from what they see on TV, they may think credit cards are a magical flow of endless money in every adult’s pocket. If they can verbalize this – it’s time to talk to them about how credit really works.
They expect to get something whenever you’re out shopping.
I feel like this was one of my biggest mom fails for a long time. Every time we were out shopping ANYWHERE I would allow my kids to pick something. To me, it was worth the money to have them cooperate on the shopping trip.
Boy was I wrong about what this habit was actually teaching my kids. The headaches it gave me down the road were far worse than simply having said “No” on the spot. Which leads us nicely to…
They throw a tantrum when you say “No” to a purchase in a store.
Every parent HATES being the one who’s kid is melting down in the store. So, many of us do whatever we can to avoid it. Like, letting them have whatever they want just to simply avoid the public embarrassment and shame that will come along with their tantrum.
In reality, if they react this way to your saying no, it’s a definite sign that they need to learn about what can and can’t be bought and why. They need to learn how money works and when and where it should be spent.
It’s never too early to start talking about money
Bottom line, it’s never too early to start talking to your kids about money and showing them the real value of money. The more kids see and are involved in your conversations about finances and budgeting, the better prepared they’ll be to handle their own finances as young adults.
If you grew up with no concept of the value of money, you don’t have to repeat the pattern with your own children.
Now that you know your child NEEDS to learn about money, what do you do?
First, you’ll need to know if they are cognitively ready to learn about money. Can they count? This is important. For more information on determining if they are cognitively ready to talk about money, check out this post.
If you decide that they can handle the topic, next you need a plan. This is where we can help you! We’ve devised an action plan for establishing a chore system and budget WITH our kids. To completely understand the value of money, it’s so important that your kids be involved in the family budgeting process.
As a mom, there’s never just one job that you have to cover. It’s an endless barrage of task after task after task that can be overwhelming.
So, it makes sense if you can create a system that helps you feed two birds with one seed. Right?
What if you could help your kids with the following habits: doing chores, managing their money, and becoming more civic-minded by donating to charity? And it’s possible to do all of this with one system.
One System Can Teach Kids Three Healthy Habits?
Like a lot of parents, I’ve created a chore chart as a way of tracking if my kids do the things they’re supposed to for their weekly payment. This can be a combination of chores they’re expected to do as being part of the family such as brushing their teeth and cleaning up the sink after themselves to those that go above those expectations.
Each time they do a chore, they place a chore stick into their bin so I can track if they’ve done what they are supposed to. This means it makes them responsible for their own actions. I simply ask how their chores are coming and they have a tendency to self-regulate without me nagging them about getting their work done.
What makes this system great on multiple levels is that it accomplishes several things.
First, it builds healthy habits. No one is going to be standing over them when they get out on their own checking to see if they’ve done the dishes or swept the kitchen. They need to learn how to self-regulate and monitor their own behaviors. So, it’s important to teach these healthy habits at an earlier age before they get released into the real world.
Build Healthy Habits
It teaches them the importance of working for money. If they don’t do the chores, they don’t get paid. This instills in them that they have to earn what they get and not just have it handed to them. The amount of personal responsibility this gives them is amazing.
Earn Screen Time
Another thing it provides my kids is the ability to earn screen time. No one wants their child turning into a mindless zombie, but we also don’t want them completely shut out from the amazing technology that this generation is in love with.
My kids don’t get screen time during the school week. But they complete their chores in order to earn weekend screen time. This makes them appreciate earning their time and it also means they value the time that they do get.
Teaching the Healthy Money Habit
Now, every family is different, but in my house, we give our kids $10 a week for completing their chores. We have a bank system they use to keep track of their money. Each week, I give them the $10 and they have to decide how much they’re going to put into each of three “accounts”—spend, save, and give away.
The spend section is obvious—the amount of money they want to use right now to buy something like snacks or a small toy. The save account is where I teach them to delay gratification. Sure, they might want a really expensive item; but they have to learn to wait weeks or even months to earn enough money to buy it themselves. But the real difference is the “give” account—this is money they set aside to donate to charity. This instills in them a desire to help others. But it also gets them to see beyond themselves and donate to charities that they want to give to.
Best Part of the System is The Communication
I love being able to sit down with them and have them explain their thought process on how much to spend, save, and give. It allows me to check in and see how they are learning healthy money habits.