Last year my son received cash for his birthday from several of our friends and relatives. I won’t share the total with you, although I will say it was more than I carry around in my wallet at any given time. This was the first year cash outnumbered the amount of toys he received and to be honest it felt weird. It felt too grown-up for my little boy who, up until then, had been happily dealing in stickers and candy as currency. Cash requires responsibility and the ability to do basic math, neither of which my son was very adept at yet. My husband and I quickly realized it was time to teach our son about money and not just how much each coin or bill was worth, but its actual value and purpose.
Like all children, my son understood that money could get him things he wanted, but it’s the worth of the dollar that seems to escape kids: its usefulness, its benefits and its purpose. So, how do we teach our kids the value of money and its importance in the global economic system (i.e. you gotta have it)? How do we teach them to honor it without idolizing it?
Turns out, there are lots of ways to teach kids of all ages the value and function of money while balancing a healthy mindset around it. Experiment with the following ideas and implement any that seem to resonate the most with your kids. Let us know what works for you!
Make it fun!
Making money fun will help kids have a healthy relationship with it from the start and hold their interest. Start with a trusty old piggy bank. Let your child choose one they love. For preschoolers, purchase toy money or a toy cash register so they can get familiar with handling money.
Be their financial role model.
You model the behavior for your kids and what they see from you is the truth. So, check in with yourself. How do you and/or your spouse handle money? How do you talk about it? Do you have a positive or negative outlook on money? If you notice you’re always stressed about money, figure out the root cause and then try adjusting your attitude around money so your kids don’t get the impression that it is something to be anxious about or to fear.
Give ’em the full story.
Get some books that tell stories about money accurately and practically. Make sure these stories include ways the characters earn, save and spend money, but also how they make mistakes. These kinds of stories will help your kids to understand the importance of budgeting in very simple terms and learn valuable financial lessons along the way.
Set up an allowance system.
There are so many benefits to allowance systems for kids of all ages and stages. They not only allow kids the opportunity to earn money for their work, but these systems help children build a good work ethic while teaching them simple budgeting and math basics along with goal-setting and perseverance.
Help them earn money.
Do you remember the sense of pride that came with your first job as a kid? It might not have been glamorous, but it was probably honest work that gave you a sense of ownership. Team up with your teen to find a part-time gig that plays to their strengths and helps them develop different skills. Kids at any age can start their own business from pet-sitting or lawn mowing to lemonade stands or custom slime kits! Remember to think outside the box.
Share expenses.
For kids that earn money, whether from allowance or a part-time job, have them pay for items they want like video games, toys, candy, etc. You might even try holding your older children accountable for any expenses involving extra-curricular activities or shared expenses such as groceries or car-related expenses like gas and routine maintenance. This will show them the importance of assessing needs versus wants and get them to start budgeting.
Dinner is on them tonight.
Have your kids plan and make a meal for your family. Think of the time and money you invest in making meals for your family. Chances are your kids don’t see that side of the process and would probably be shocked at how complex meal planning can be. Have them go through the process of choosing a recipe, making a grocery list, searching for coupons, going to the store and making the meal. This has actually helped my son not only see the effort that goes into all of our family meals, but how far (or not) every dollar goes.
Open up a savings account and watch it grow!
There are a lot of options when it comes to kids savings accounts. Do your homework and find one that will meet the goals you and your child set. Not only will your child find it exciting to watch their money multiply, but they will feel a sense of empowerment when they own an official savings account.
Introduce the concept of budgeting.
There aren’t a ton of ways to make budgeting exciting, but luckily we live in the age of apps and apps can offer up some fun and creative ways to teach kids how to budget. Check out the Dave Ramsey Every Dollar app so kids can get up close and personal with their spending. Or try Greenlight which offers financial literacy games your kids can play along with chore and allowance tracking.
Have a family money jar.
This is a lot of fun! Get a large glass jar and place it somewhere visible where all family members can see it daily. Set a goal your family agrees on (ex. dinner at a fancy restaurant) then start collecting change. Before you know it your family money jar will be overflowing! This system encourages team work and generosity. Helpful tip: make sure your jar is clear so your kids can visualize the savings start to grow!
Remind your child that money isn’t everything.
Along with a healthy attitude, please remind your kids that while money can provide options and opportunities it cannot buy the most important things in life like joy, peace, friendship and love.
