3 Top Tips for Teaching Kids About Money

 

You know what they say— money makes the world go ‘round. There is, of course, certainly much more to life than spending money. How can we teach children how to save, invest, give and spend responsibly?

(1) Be a financial role model

You can show your children how you save and spend money in several ways. Bring them to the bank when you make a deposit or an investment. Use coupons at the grocery store. Demonstrate how you choose one product over a similar, yet more expensive one, so that you stretch your dollar more effectively. And of course, show your children how, because you saved, you now have the ability to purchase something special that you would not have been able to afford had you been more careless with money.

(2) Allow children to manage money

Do you give your child an allowance? Or, do you allow your children to earn money for extra jobs, beyond their typical chores or contributions, that they do around the house? Allowing your children to handle small amounts of money provides them with the opportunity to manage money within safe parameters.

Think of it this way. Wouldn’t you rather that your children learn valuable lessons about spending too much for a junky toy now rather than waiting and having them learn them as adults when the rent check bounces?

(3) Teach your children to divide up their money

Children should learn at an early age that all money should not go in one big spending pot. We got each of our children a piggy bank that separates money into 4 pots: spend, save, give and invest.

What percentage will they save? What would they like to invest in longterm? And how much of their money will they save each year?

Determining how they will handle their money in advance gives them something to shoot for as well as a strong understanding of the different jobs money can do. By taking the time to include your children in some appropriate financial decisions while teaching them the value of money in an enjoyable manner, your children will be well on their way to cultivating a healthy relationship with dollars and cents.

I’m Dr. Robyn Silverman for KnowMoretv. Live smart, be healthy, know more.

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About the author

Dr. Robyn Silverman

Dr. Robyn Silverman is a child/teen development specialist, body image expert, sought-after speaker and award-winning writer. She graduated with her Ph.D. from Tufts University’s prestigious applied child/teen development program. She is known for her no-nonsense and positive approach to helping young people and their families thrive. Her ground-breaking research at Tufts University on young women is the foundation for her book, Good Girls Don’t Get Fat: How Weight Obsession Is Messing Up Our Girls & How We Can Help Them Thrive Despite It (Harlequin Press).