A financial education for kids is one of the best gifts you can give to your children.
Whether your kids are just learning to talk or you’re getting ready to drop them off at college, it is SO important to teach money management for kids. In our microwave culture where kids want what they want and they want it know, it is critical that we teach (and model!) the concepts of hard work, patience and responsibility.
If you’re looking for ideas on teaching kids about money, look no further. Here are just a few tips:
1. Start Young
I’m not all about paying kids an allowance for jobs they’re expected to do, but I do support starting young by paying kids for extra jobs or for things we value in our home. For instance, I’ve paid my older child for reading a certain amount of books on our own and both can early coins for memorizing Bible verses. If they only earn $.50 a week from spare jobs, they’ll learn just how valuable that $20 toy really is!
2. Talk Money
My father grew up during the Great Depression, so he truly understood the value of the dollar; our kids today have no clue. Help them understand what money is, where it comes from, how much things cost, and what you do to earn money. While you don’t want to over-emphasize the importance of money in your life, you do want your children to be aware of what happens ever time you swipe that card!
3. Speak in their currency
Small children may not understand the true value of money (my 4 year old would much rather have a handful of pennies than a dollar!), so you may have to “pay” them in ways they understand, such as tv time, game time, or other special treats.
4. Delayed gratification
There is so much value in letting children wait for something they want. Not only will they learn the value of “no” (which will keep them from becoming spoiled adults), but they will also learn a valuable lesson in self-control and restraint.
5. Mistakes are OK
One principle I hear over and over again from my mentors and other parents I respect is that they’d much rather have their children fail under their own roof where they are there to pick them up, dust them off and help them recover than to rescue them repeatedly, only to send them out into the world to fail on their own. As children grow older and exhibit maturity, give them some autonomy to make their own financial decisions.
The bottom line when it comes to financial education for kids, establish healthy habits as soon as possible. Show them the proper way to save, spend and give today so that they will be financially savvy tomorrow. Teaching kids about money now will help them avoid some of the pitfalls we fell into when we were young!