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Teaching Our Children About Money

As our children grow up, so does their need to understand finances. Teaching a child solid money management habits early on in their life will likely have a very positive impact on how they handle things when it comes time to support themselves. Here are some ideas on how we can get children involved in some money management exercises:

Invite Them Into Your Decision-Making
All words and no actions is a formula that rings hollow. Not only that, but it’s also much harder to effectively teach children about concepts that remain abstract. They need something tangible to look at- something like you! The idea is to give them a glimpse “behind the curtain.” They only see the show on stage, but you an reveal how you make it happen. This could mean sharing a simple version of your budget, explaining. how the money flows into your family coupled with an outline of where and how it goes out.

Give Them A Charity Budget
Even if you’re not a fan of allowances in the traditional sense, consider giving regular money to your child for charity. This may mean they actively give money to a local organization helping less privileged children or one that’s involved in some other cause your child believes in.

 

Making Saving A Requirement
According to DoughMain’s 2012 survey, “51% of parents give their children allowance, but only 4% require them to deposit that money into a bank account.”
You may want to require saving by including it in the terms of an allowance or other ways your children receive money. It helps to have something specific in mind that the money is being saved for, such as an upcoming concert or the latest toy, or longer-term goals later on in life such as a car or college.
Our children will miss out on a central part of financial responsibility if we don’t teach them about saving. Delayed gratification will be hard, but they will be able to tangibly understand that keeping some money aside can have big benefits down the road.