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As my son just turned 18 months, he’s still a little too young to understand and appreciate the value of money. But it’s still on my mind about how I’m going to teach him to appreciate and value the importance of money and money saving tips as he gets older. While I’m sure that things are destined to change as time progress, here are a few of the things that I feel will be beneficial when he is old enough to appreciate:
1. Show Them What You’re Working With
Currently my wife and I used a basic Excel spreadsheet to keep track of all our monthly expenses and our monthly cash flow. I think it will be truly beneficial to sit down with our son to kind of show him what we have coming in versus what we have coming out. We would then show him what we contribute towards our savings account, what we tithe, and also retirement savings. That way we show him that every dollar that comes in is not spent, and a good chunk goes toward either the savings account or saving for his college education.
2. Get Techy
Nowadays there are many money education sites that can teach kids the basics of money. One example that comes to mind is kids.gov. Before they plan to work for money, they must be comfortable with the real thing. They need to touch dollars and coins, count them, stack them and learn that they are concrete things.
When they become a little more advanced, you could even consider games like the Stock Market Game. Kids are able to invest $100,000 of fake money and purchase securities at real time. That way they could really see how the market really works.
3. Walk the Walk
Kids watch more than they listen to lectures. You might be the greatest money manager in the world, but if you don’t show and tell your kids on what you’re doing then they can’t learn from you.
4. Make allowances count
Growing up my parents gave me basic chores of just mowing the lawn and taking out the trash, and the only thing I really got paid for was the lawn. I think, though, that by incorporating other weekly tasks for my son to do, will give him both a sense of responsibility, and also an appreciation for the money that he earns for the task that he does. Go beyond spending money. Require kids to save, invest, and donate. They need to learn that money isn’t just for spending.
5. Play Match Maker
Just like a 401k match, you can add to their savings total. That should give them an incentive to fill their piggy banks. Don’t forget about the grandparents! Let them match, too.
6. Be Nice, Just Not Too Nice.
Even if you can afford to give your kid a comfortable allowance, don’t. By about age 12 kids should do small paying jobs for friends or family members. At 16 they’re capable of getting summer jobs and saving for their own expenses.
No matter how you do it, teaching your child the value of money is imperative to their financial success. Give your child the tools they need to be become a financial champion!
Photos by Jason York Photography
Securities offered through LPL Financial, Member FINRA/SIPC.
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I always wondered how early you can start teaching kids about money but I think even starting when they are a few months old is better because they become familiar with it.
Sadly I had to learn this on my own the hard way when I was 23. Imagine if I learned 10 years before, I could be living in my own house right now.
It also depends if the parents themselves know and understand money, because really if you look around many don’t.
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I don’t know if you have ever seen the original Cheaper By the Dozen Movie, but hte parents had an interesting idea. They shared with the kidsWhat kinds of things needed to be done around the house, and the kids put in bids to get the jobs. Sometimes they were competing against each other for basic chores, but other times they were competing against a business, like lawn care.
It is an interesting way to let kids put value on their own time. But this would only work for kids that actually wanted/needed money. So parents have to not pay for stuff, so that their kids realize they have to actually do something in order to get what they want.
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Great advice. I think a child is never to young to start learning about money. And where do they learn the most? From their family! You have to be open with them on what money is about and what your values about money are. It’s too easy for kids to get the wrong idea. You have to take a minute every now and then and get them involved in your finances and explain where things come from and where they go.
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Growing up I had an allowance and when in high school had summer jobs to be able to save some money. It really helped out a lot and teach me the value of a dollar.
When you’re young, it is nice to learn how to save. This would be the best time to train your children on how to save money.
I have the same question as Tom, when do you think is a comfortable age to start the teaching process? Also, you need to introduce some concept of how much money is how much; either by revealing rent/food costs.
That said, my parents never really did anything like that; they went w/ deprivation lol. I.e. no true allowance, and instead took my money from my jobs or just saved it for me. I think this fed into my frugality heh…
Number 3 and 5 are great!
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I don’t know what the magic age is when to start teaching your kids. I think first and foremost they will learn by your actions. My 19 month is very observant and already picks up on certain situations right now. I can’t imagine how he’ll be in 6 months. How many times have you been behind parents in the line at any store and their kid is begging their mom or dad to buy “X” for them? I think it’s always neat to see how the parent reacts. Little lessons like that I think are huge in your child’s learning and appreciation of money.
Great post – I too have to ask the question of when to start teaching kids about money. Maybe it will be obvious when they are ready?
Mike
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