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