Tips for Teaching Kids About Money and Finances

Money is one thing that permeates every area of our lives. Without it, it is next to impossible to live, and even at an early age it is important to understand the value of money, how the manage it, and how to control it before it controls you. Here are some important things you can do starting right now to make money your ally rather than your master.

Do not avoid money.

Take an active role when it comes to learning about money, ask questions, and watch what goes on around you. Observation and repetition are great ways for you to learn so talk with your parents about being involved in the family finances and ask them to help you set up your own budget plan.

Look to adults for good money practices.

Look to parents and family members for tips on how to save, how to make your money grow, and how to be a wise spender. You can learn a lot by the choices the adults in your life make both good and bad. Follow them when they do good and learn from their mistakes so you do not make the same ones.

Learn the differences between needs, wants, and wishes.

This is one of the most important things you can learn when it comes to money that will help you later in life when it comes to making good money choices.  Ask them these questions: Do you need that new doll or do you just want it? Do you need that expensive dress or would a cheaper one be just as good? Do you need to get that new makeup kit now or can it wait another week or two? Distinguishing needs from wants will go a long way in helping them avoid financial troubles as they get older.

Focus on saving over spending.

It is never too early to begin saving money. You likely already have a piggy bank or something similar you put coins in or that you save your allowance in. This is wonderful and you need to continue doing so for the rest of your life. Nine times out of ten it is better to save that $5 rather than spend it if you are able to do so. You never know when a true need may arise and it is always good to have that money saved for times like that, so focus on saving rather than spending every chance that you get.

Practice making a budget and sticking to it.

If you are already saving money in a piggy bank, old mayonnaise jar, or someplace else you are off to a good start. But you can take it one step further. Get several empty jars and label them- ‘savings’ ‘wants’ ‘needs’ ‘fun’ and then divvy your allowance and money between them. Savings is to be set aside and not touched unless something big happens like a family vacation or someone’s birthday. The wants jar is for those little things that catch your eye- new dress, new toys, and things like that. The jar labeled needs are for the things you need from time to time like new shoes or school supplies. The final jar is for the fun items and the things you may need extra cash for- trip to the beach, money for a trip to the arcade, and other things you want to do. Learn to budget your money so you control where it goes and how you spend it.

Keep good spending and saving records.

Write down everything you spend your money on. It is amazing to see just how much money you spend on things like soda and candy, toys you never play with, clothes you wear once then forget, and things like that. You will also be able to see how much money you save month to month. Much can be learned by recording where you spend your money and how much gets spent and where you spend it.

There are many benefits to learning how to control money before you become a slave to it. Far too many adults fail to learn these important finance lessons and pay for it the rest of their lives. But you can learn to make money your ally rather than your enemy and you can make it something that works for you, rather than you always working for it. Start with these great money tips and continue at it for the rest of your life!

 

The following was a post by Sarah Jo Lorenz-Coryell

Leave a Reply

Your email address will not be published. Required fields are marked *