Money makes the world go round. That is just a fact. We all have to have it. All but about 2% of the population does not have enough of it and many people struggle to understand it.
But now matter what position someone is in, it is imperative that children learn the value of money. And the sooner they learn about it, the better. In fact, studies show that kids that learn about how money works, how fast it can go and how important it is to save have more financial security later in life.
With that being said, it can sometimes be hard to know how to teach your kids about money. It is not a fast process and as the child grows, so should the responsibilities. But where do you start and how do you drive home the point without making your children feel like money is the only thing important in life?
My children are all under 6 and they barely know the difference between a quarter and a penny. But they are still old enough to understand that everything does cost money and that it is not a readily available asset. Here are a few things I do that are helping my kids understand money and how it works.
1) We discuss what we are buying ahead of time. Anyone with kids knows that when headed to the store with them, you are inviting the inevitable, “Mommy, can we buy….?” and “Mommy, can I have…?” requests along every aisle. So before we even get to the store I have my oldest write down the items we need on a list, have my middle daughter carry the list, and ask my youngest to help identify the item on the shelves. We are focused and on task and if something comes up that is not on the list, they know that it is not allowed. Because everything costs money. And if we buy things not on the list we will spend more money than we have. I still get the requests – they are kids – but by refocusing them and teaching them about what we have and don’t, I am instilling valuable lessons for later in life.
2) Don’t give an allowance. My kids are not handed money once a week. They earn it by doing something that is not on the chore chart. We call those activities “work”. Cleaning their rooms and picking up their toys from the rest of the house are expected chores that come with living here. But when my 6 year old actually took the trash out the other day, she earned a quarter for “working”. I have noticed since starting this “work” and “chore” system, the kids are eager to “earn”.
3) Let the kids see your receipts. I love doing this with my kids. We go shopping, we buy what is on our list and then I show them the receipt and let them see how much everything costs and how it adds up. They look forward to this activity and I have noticed now look at prices in the store when they see something they want. I know this will pay off later as they grow and understand how spending money works.
In reality, no matter how you do it, any lesson that can be taught about money is important. Whether it be showing your teenager your credit card statement so that they understand interest rates, balances, unpaid debt to teaching a young adult how you manage your own household budget, any lesson or exposure to smart money management can only be good.
This is a sponsored post with information sourced from Genworth Financial.