How to teach your kids about money
The best way to teach kids about money is to be a good role model. Here are a few easy ways to show kids the value of money.
Show your child how to save, spend and give
Saving money is important, but so is spending and giving to charity. To help your child learn responsible saving, spending and giving, help him or her start three coin banks.
One of the best ways to do this is with three jars. Allow your child to decorate each jar however he or she wishes, with the word “Savings,” “Spending,” or “Giving,” clearly printed on the front of each. As your child earns money, encourage him or her to put a predetermined portion of every dollar into each jar. For example, if your money-smart kid earned four quarters, two might go into Savings, one into Spending and one into Giving.
When the jars are full, take your child to the credit union to make a savings deposit and allow him or her to hand the Giving money directly to the charity of his or her choice. Your child will see the value of money and the value of giving in the community.
Discuss wants vs. needs
To put it into kid terms, a want is something like a new video game or cable television. Needs are food, clothing, shelter and school supplies. Show your child that the family budget goes toward needs first and then wants.
Take your child shopping
When at the grocery store, explain how you are comparison shopping, why you choose certain brands over others and how much things cost. The realization that food costs money may take some children by surprise.
Show your child the family budget
If you’re comfortable doing so, show your child where your paycheck goes each month. Highlight items in the budget he or she might understand, like the cell phone bill or holiday budget.
Teach checkbook balancing
If you haven’t balanced yours in a while, now is a great time to get back into the habit.
Explain the difference between a credit card and a debit card
To some kids, plastic is just plastic. But we all know there is a big difference between credit and debit cards.
In the end, the best thing you can do is pass on your good money habits to your child. And if you have some bad money habits you’d like to fix, now is the perfect time to do so.
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