Money tips for kids: Easy ways to show how money works
There are times when it feels as if kids don’t understand anything about how money works or the value of things they use each day. This can show up in a number of ways. For some parents, no matter how much they provide them, their kids will find something else to ask for next. For other parents, it can seem that kids don’t care for the things they receive and waste items that cost hard-earned money.
Luckily, there’s something that parents can do to turn this situation around. Below are some proven money tips for kids that can teach them how money works and the value of things that are bought for them. With these money tips, kids will respect what they have and will be better prepared for their financial responsibilities as an adult.
Take kids to the grocery store with you
Bringing older kids to the grocery store with you can be a great way to impart lifelong lessons about the value of money. How does this work? While you’re there, point out the cost of the items. If they’re old enough, ask kids to shop for things at a certain price point, such as picking out the best price in breakfast cereal or shopping for $5 in apples. Once your cart is full, have kids go with you to the checkout, bag food, and help to pay for items. The bonus to this approach is that it teaches kids math skills while also learning the value of what they’re purchasing.
Give kids small jobs around the house or neighborhood
Most of the time, there are lots of extra jobs to be done around the house that go beyond what kids routinely do for their allowance. If kids requests for items start to pile up, ask them to earn the money they want to spend by taking care of some of these added tasks.
If all the tasks around the house are taken care of, there may be opportunities for kids to earn money around the neighborhood. Depending on their age, kids can earn money by raking leaves, clearing snow from driveways, walking dogs, participating in a garage sale, operating a lemonade or snack stand, or pet sitting. If they aren’t finding jobs easily, kids can also create flyers to advertise their services. If they invest more time in getting work, they may value it more and learn a bit about marketing their business.
Pay kids for their work using a debit card account
Instead of paying kids in cash, consider paying them through a debit-card type of account. There are a number of types of these cards that are tied to secure accounts and mirror the way that debit and credit cards work for adults. Using these kinds of cards helps them learn to manage accounts while it also helps them understand the relationship between a card and the assets they have. To take the lesson further, review the online reconciliation of their accounts with them on a regular basis.
Bring kids to a bank to open up a bank account or investment account
Consider allowing your child to open a bank account or a small investment account so that they can deposit money from earnings and watch their earnings increase over time. Once they’ve opened their account, monitor their deposits with them. Take the time to review the details of statements so that they can understand when money was deposited, when it was withdrawn, and how it earned interest and grew over time. They will be proud to watch it grow, and learn its value while also becoming more financially literate.
Have kids write thank you notes for monetary gifts
Ask kids to write thank you notes for any monetary gifts they receive. While a pen and paper note may feel a bit old-fashioned in the modern era, it has a lot of benefits if kids complete it thoroughly. While they’re writing the thank you note, ask them to verbalize what they bought with the money and why it was of value to them. This approach has the added benefit of teaching kids manners, giving them a sense of gratitude, and helping them to develop language and writing skills.
Point out your financial values in action
Every family makes a number of financial decisions as part of their daily life. As you make some of these decisions, consider explaining the rationale behind them to your kids. This doesn’t have to be particularly formal or complicated. It can be as simple as explaining that you’re going to be eating fewer meals out because you’re saving up for a larger purchase like a family vacation or new car. Other families show a preference for saving by keeping a loose coin jar in a central place in the house or setting savings goals that family members work towards together through doing extra jobs or making small sacrifices.
Teach kids simple financial terms
When you talk with kids about the financial side of your life, you may want to develop a list of concepts that you expect your kids to understand by a specific age. As you’re teaching these to kids, try not to get caught up in the vocabulary that’s so common in the financial industry. Keep in mind that while children need to become familiar with how things work, financial terms can be overwhelming to them. If you explain things more simply but use the terms frequently in discussions, they’ll catch on more quickly. And remember, if you don’t….there’s a good chance no one will.