Children who learn the value of money early can apply those lessons throughout their lives. Try these 4 ways to teach your kids about money so they understand how to use it wisely as adults.
Encourage Your Children to Earn Money
It's difficult to understand the value of a dollar when you don't have to work for it. Encourage your kids to earn their own money so they can learn how much work it takes to make a few bucks.
Depending on your child's age, you might encourage them to:
- Open a lemonade stand
- Sell fruits and vegetables from a backyard garden
- Cut grass
- Shovel snow
- Do odd jobs
Take Your Kids ShoppingMake your kids an important part of your weekly grocery shopping. Show them that you only have a certain amount of money and that you need to buy enough food to last the whole week.
Sit down before you head to the store so you can make a shopping list. If they include unnecessary or extravagant items on the list, ask them how that will affect their ability to buy more important items.
They'll quickly learn that spending money is about making choices.
Show them the Importance of Saving and InvestingEven a small amount of money can seem unbelievably large to a child. Children, after all, aren't thinking about mortgage payments and retirement.
Show your kids that saving and investing is an important part of financial responsibility. Start by having them save for big purchases, like video games or clothes.
Once they get older, you can expose them to the merits of smart investing. Let them read Fisher Investments articles and bio. Use the information you find to choose a stock together. Over the next several months or years, track the stock to see whether it earns money.
Get Your Kid a Credit Card EarlyVery young children usually need to handle physical money to grasp the basic concept of spending and saving. Seeing coins accumulate in a jar teaches them that saving small amounts can lead to more spending power.
Once your child is old enough to understand that money is an idea more than a physical item, it's time to get him or her a credit card.
Pre-paid credit cards will let you add your child's allowance to the account weekly or monthly. It's important for children to learn how credit cards work. That way, they won't make big mistakes as adults that can leave them buried in debt.
Your kid may eventually live in a world where few people use cash money. It's important to teach them about the advantages and pitfalls of credit as soon as possible.
What other strategies have you used to teach your kids about the value of money? Have you gotten more success from some attempts than others.