Top Tips for Introducing Kids to Money

Educating, motivating, and empowering children to become regular savers and investors will enable them to keep more of the money they earn and make smart choices with the money they spend. Here are some simple ways to help educate children about personal finance and managing money:

1. As soon as children can count, introduce them to money, whether it’s play money or the real thing.

2. When the right opportunities arise, communicate with your kids about how to save, how to make money grow, and how to spend it wisely.

3. Help children learn the differences between needs and wants, which will prepare them for making good spending decisions.

4. Use grocery shopping as a teaching opportunity. Spending smarter at the grocery store (using coupons, shopping sales, and comparing unit prices) will help young people understand the value of money and the importance of budgeting for important purchases.

5. When your child begins asking for money to spend, introduce goal-setting, and ways they can earn money to reach their goals.

6. Give children the opportunity to earn their allowance, by placing a value on certain age-appropriate chores. This way they can earn the money they want in order to reach their savings or purchase goals.

7. Introduce children to the value of saving versus spending. Older children can be taught the concept of earning interest income on savings. Consider paying interest on money children save at home.

8. Take children to a credit union or bank to open their own savings accounts. Beginning the regular savings habit early is one of the keys to savings success.

9. Keeping good records of money saved, invested or spent is an important skill for young people to learn. Use 12 envelopes, encourage children to place receipts from all purchases in monthly envelopes and keep notes on what they do with their money.

10. Allow young people to make spending decisions. Whether good or poor, they will learn from their spending choices. Talk about the importance of doing research before making major purchases and determining value versus price.

The bottom line is, talk with your children about money. Children who develop a healthy relationship with money and learn how to make the most of what they earn are more likely to take their good habits into adulthood.

Related Posts

No related posts.