Teaching your kids about money
It is part of our protective parental nature to hide the stresses of being an adult from our children. There are certain things we decide not to do or discuss in front of our children, and money trouble is quite often one of them. Kids see money coming out of machines in walls and don’t quite understand that money is finite and limited in your household.
Parents have the urge to provide for their children no matter what the cost or sacrifice, but there is a way to teach your kids about the value of money which will help them understand it later in life. And it might ease the pressure from you in the meantime too!
Some lessons we can teach our kids early
I’m going to tell you about some great activities you can do with your kids to teach them the basics of good money management. In each of the following activities you can try to get across the following lessons:
- Good things come to those who wait. Show your kids how exciting and rewarding it is to save for something they want as opposed to rushing out and buying it straight away.
- Money doesn’t grow on trees. Try to help your kids understand money doesn’t just come out of an ATM when you need it. You work hard for your money and you only have a certain amount to pay for lots of things.
- The best things in life are free. The best thing about the following activities is that they will not only get your kids thinking about money, but they will allow you to spend lots of quality time with them, which is the best thing a kid can get. You can also teach them to be charitable and show them there is more to life than possessions.
Giving kids money for chores
There is a great debate raging across the world about whether or not it is appropriate to pay your kids for odd jobs around the home. Personally, I think it is fine, as long as you teach your kids the value of their pocket money along the way. The activities in this article will help you to do achieve that. But of course, it is entirely up to you to reward your children for doing odd jobs with money, give them weekly pocket money or teach them about money without giving them a budget.
The good old fashioned piggy bank
There is nothing quite like rattling a piggy bank and glowing with excitement at all the coins inside. Kids often don’t need much encouragement to start putting money away in their piggy bank, but you can help them set savings goals which will stop them from spontaneous spending and show them how good it feels to save for something they want.
Help your kids set a goal by getting them to choose something they would like to buy. You can put a price limit on it, let’s say $20. You can then make up a chart with their item at the top and write $5, $10, $15 and $20 along the side of the chart. When they have saved $5, colour in the chart up to the line. This way, kids can see their progression and know when they are close to achieving their goal.
A Family Affair
Usually it’s up to mum and dad to keep the house running smoothly. It’s time to get the kids involved! Are you planning the weekly grocery shop? Get your kids to sit down and help you. They might also give you an idea about what they want for dinners in advance. Make sure they know you can only buy what’s on the list as you only have a certain amount of money to spend on groceries. This way if the kids come shopping too, instead of asking for something not on the list, they can help you gather the items you need, like a scavenger hunt.
The gift of Giving
Before Christmas, or Birthdays or even once a month ask your kids to round up a few toys they haven’t played with in a while to donate to charity. Not only will this keep the clutter down, but your kids will learn not to put such high value on their possessions and develop an appreciation for charity and giving.
Open up a Bank Account
When I was younger Commonwealth Bank had a campaign aimed at kids called Dollarmites. It was great! These cute little cartoons would teach me about money, I had my own bank account I could deposit money into to earn interest. I had a deposit book and I would receive monthly statement so I could watch my wealth grow. You don’t need to go through CommBank to provide this to your kids. You can simply open up a high interest savings account in your child’s name. (Make sure there isn’t a minimum deposit amount, or ask your choice of bank about options for kids) Buy your child a binder and encourage them to keep their statements. Receiving mail is so much fun! (And a novelty for kids these days) so they will look forward to receiving their statement and watching their bank account grow.
For the big kids
When you kids turn into teenagers it’s time to get them seriously involved in your finances. Show them your pay slip and teach them how to read it. Explain sick days, tax and hourly rates. Take them with you when you do your tax return or ask them to help you do it online. If you like, when they get a job you can ask them for board (even if you deposit it straight into a savings account for them) so they get used to having expenses like rent and bills. It’s when they are living at home with very few responsibilities that they can take the time to learn about how to survive as an adult.