5 Ways To Teach Kids About Money
KNOW THE DIFFERENCE BETWEEN WANTS AND NEEDS
While you may be personally guilty of not always knowing the difference between a want and a need (#target), you can still preach what you don't practice. At a young age, kiddos begin to understand the difference between needing a big ol' box of cookies and having enough food to pack school lunch for a week. "Older children and teens can further refine their understanding of what constitutes a need. For instance, while everyone needs clothing, designer jeans fall into the want category. Likewise, a home is a necessity, but a personal bathroom or even one's own bedroom can be characterized as a want, rather than a need." - 7 Lessons to Teach Your Kids for Financial Literacy Month
MAKE YOUR KIDS WORK FOR IT
While many households subscribe to the weekly allowance model, you don't have to just because your parents did. There is value in assigning tasks to receive funds. You know, like a job. There are a myriad of ways to go about this, from adorable popsicle stick chore jars to just telling them what to do when and how. "This concept helps your kids understand that money is earned —it’s not just given to them." - 15 Ways To Teach Kids About Money
TAKE THEM STRAIGHT TO THE BANK
Modern day banking can be very detached from the actual bank. Some banks out there don't even have a brick-and-mortar in your town forcing you to do everything online. But if you take a field trip to the bank one day to introduce your kids to the concept of bank accounts and credit, it will benefit them in the long run. "It’s never too early to start teaching your children the importance of saving. If they learn good habits early, they are likely to continue them throughout their own lives." - South State Bank
SET A GOAL AND STICK WITH IT
If your kid is receiving an allowance or earning their keep, they can begin to work towards a purchase goal. Hypothetically, let's say Little Johnny wants that new Make Your Own Science Lab Experiments Kit (to undoubtedly see what in the yard will melt in whatever that liquid is that comes in those kits); but he's got to pay for it himself. Every week, teach him to set aside a portion of his earnings in a clear jar (so he can witness the savings build up) and do the math on how much more he has to go. He'll see with his own eyes that his hard work can contribute towards a financial goal while also learning that he himself is capable of being in control of the money.
start saving before they talk
You went to college. Or you've heard someone bemoan their college loan. It's one of the single largest expenses that can befall a person. So while you may not be able to save the lion's share of tuition before Little Suzy turns 18, you can give them a leg up to cut down on any future college loans they take out. And if you aren't cool on opening up a 529, there are a bunch of other options that will allow you and your kid (who can begin to contribute to their own future) to stockpile G's come graduation day.
Don't forget to include your kiddos in the conversation about saving and paying for college. Let them know your expectation about their input to the expense. It may not be in your plan to take on the entire cost, but it is unfair to blindside them when it is time to pay the bill. Keep a open, ongoing conversation and everyone will stay on the same page.