When it comes to money, adults often have a lot to learn. Teaching kids about money is even more essential. It’s never too early to start learning about personal finance and how to manage money.
Whether you are a teacher, a parent, or a mentor, there are many ways you can help kids learn about money. You can start simple with age-appropriate activities and build from there.
In this article, we’ll go over some of the most tried and true methods for teaching kids about money.
11 Ways Parents Can Teach Their Kids About Money
One of the most important principles to remember when teaching your child about money is this:
It is NEVER too early to start.
Your child is never too young to start learning about money. In fact, the sooner you start, the better. Why? Because money management is a skill that takes time to develop. The earlier you start teaching your child about money, the more time they will have to practice and master the concepts.
Here are some specific ways you can work with your child to help them learn what money is, how it works, and money’s value:
1. Give Your Child an Allowance
One of the best ways to teach your child about money is to give them an allowance. When you give your child an allowance, you are teaching them several key concepts about money.
First, you are teaching them that money is something that is earned. They will need to perform certain tasks or behave in a certain way in order to earn their allowance. This is an important concept because it will help them understand that money is not something that is simply given to them; they will need to work for it.
To decide which tasks should be paid for and which tasks should simply be done because your child is a part of the family, ask yourself this question:
Would I pay someone else to do this task?
If the answer is yes, then your child should be paid for performing that task.
Second, you are teaching them about budgeting. When you give your child an allowance, they will need to budget their money in order to make sure it lasts until their next allowance. This is an important skill to develop because it will help them understand that they cannot simply spend all of their money as soon as they receive it. They will need to be mindful of their spending in order to make sure they have enough money to last until their next allowance.
Finally, you are teaching them about delayed gratification. When you give your child an allowance, they will need to wait until they have saved up enough money to buy something they want. This is an important skill to develop because it will help them understand that they cannot always have everything they want immediately. They will need to be patient and save up for the things they want.
2. Help Them Make Choices
Another way to teach your child about money is to help them make choices. When you help your child make choices, you are teaching them about decision-making. They will need to learn how to weigh the pros and cons of different choices in order to make the best decision for themselves.
Decision-making is paramount in deciding how to spend money. They will need to learn how to compare prices, understand quality and value, and calculate whether something is worth the price. All of these skills are important in making sure they don’t waste their money on things they don’t need or want.
To help your child make choices, you can give them opportunities to make small decisions. For example, you can ask them to choose between two different breakfast cereals or two different outfits to wear. As they get older, you can give them more responsibility and allow them to make bigger decisions, such as whether to spend their allowance on a new toy or save it for a larger purchase.
3. Encourage Them to Save
Another way to teach your child about money is to encourage them to save. When you encourage your child to save, you are teaching them about the importance of delayed gratification and planning for the future. They will need to learn how to resist the temptation to spend their money immediately and instead save it for a later date.
One way to encourage your child to save is to match their savings. For every dollar they save, you can add an additional dollar to their savings. This will help them see that their money can grow over time and that it is worth saving for a larger purchase.
Another way to encourage your child to save is to set up a savings goal. Help them choose something they want to save for, such as a new toy or a trip to the movies. Then, help them calculate how much they will need to save in order to reach their goal. This will teach them how to budget their money and make choices about their spending in order to reach their savings goal.
4. Teach Them About Wants and Needs
Another way to teach your child about money is to teach them about wants and needs. When you teach your child about wants and needs, you are teaching them about the difference between things they want and things they need. They will need to learn how to prioritize their spending in order to make sure they are spending their money on the things that are most important to them.
One way to teach your child about wants and needs is to have them make a list of the things they want and the things they need. This will help them see that there are some things they can live without and that there are other things that are more necessary.
- A new toy
- A new video game
- A new pair of shoes
Another way to teach your child about wants and needs is to help them understand that they can’t always have everything they want. They will need to learn how to be patient and wait for the things they want. This is an important skill to develop because it will help them understand that they cannot always have everything they want immediately. They will need to be patient and save up for the things they want.
5. Encourage Them to Give
Another way to teach your child about money is to encourage them to give. When you encourage your child to give, you are teaching them about the importance of giving back. They will need to learn that they can use their money to help others and that this is a good thing to do.
One way to encourage your child to give is to have them donate their old toys to a local charity. This will help them understand that there are other children who are less fortunate than they are and that they can use their money to help these children.
Another way to encourage your child to give is to have them help you with your grocery shopping. You can have them choose a few items to buy for a family in need. This will help them see that they can use their money to make a difference in someone else’s life.
6. Encourage Them to Earn Their Own Money
Another way to teach your child about money is to encourage them to earn their own money. When you encourage your child to earn their own money, you are teaching them about the importance of work and responsibility. They will need to learn that they need to work in order to earn money and that they need to be responsible with their money once they have earned it.
Ask them about what kind of work they like to do vs. what kind of work they do not.
- Do they like cleaning?
- Doing yard work?
Encourage them to do more of the work they like and get paid for it. This will help them see that they can use their talents and skills to earn money.
Another way to encourage your child to earn their own money is to help them set up a lemonade stand or bake sale. This will help them learn how to run their own business and make money.
7. Help Them Understand Debt
In today’s economic climate, understanding debt is more important than ever. It is important for your child to understand that debt is not always a bad thing. They will need to learn that there are good debts and bad debts.
Good debts are those that help you improve your financial situation, such as taking out a loan to buy a house or taking out a student loan to pay for college.
Bad debts are those that do not help you improve your financial situation, such as credit card debt.
It is important for your child to understand the difference between good and bad debt so that they can make wise choices with their own money.
8. Help Them Understand Credit
Credit is another important concept for your child to understand. They will need to learn that credit is a way to borrow money and that it needs to be repaid with interest.
They will also need to learn that there is such a thing as good credit and bad credit. Good credit is when you borrow money and make your payments on time. This shows creditors that you are a responsible borrower, and they are more likely to lend you money in the future.
Bad credit is when you borrow money and do not make your payments on time. This shows creditors that you are not a responsible borrower, and they may be less likely to lend you money in the future.
Some ways you can help them understand how credit works is by having them help you pay your bills each month. You can also have them help you balance your checkbook. This will help them understand how money comes in and goes out each month and how to keep track of it all.
Role-play is also an important tool for helping your child understand credit. You can role-play different scenarios, such as going to the bank to apply for a loan or using a credit card to make a purchase. This will help them understand how credit works in the real world.
9. Use Technology
There are a number of financial apps and websites that can help your child learn about money. These resources can provide your child with a fun and interactive way to learn about money.
Some of the best apps and websites for learning about money include:
- Mint: This app helps you track your spending and create a budget. It also provides tips for saving money.
- Personal Capital: This app helps you track your investments and monitor your financial progress.
- Acorns: This app helps you invest your spare change and learn about investing.
- Money Savvy Generation: This website provides financial resources for kids, teens, and parents.
- The Balance: This website provides financial advice for people of all ages.
Using these apps, you can visually show your child where their money is going and help them make better financial choices.
10. Play Games
One of the best ways to teach your child about money is to play games. Games are a great way to teach concepts in a fun and interactive way.
There are many different games that you can play with your child to teach them about money. Some examples include:
- The Stock Market Game: This game simulates the stock market and teaches players about investing.
- Monopoly: This classic board game teaches players about earning money, spending money, and managing finances.
- PayDay: This board game teaches players about budgeting and managing money.
- Life: This board game teaches players about making financial choices and dealing with the consequences of those choices.
11. Set a Good Example
Finally, as a parent or guardian, you need to set a good example for your child. You should be careful with your own spending and make sure that you are living within your means.
Your child will learn more from your actions than they will from your words. So if you want them to be responsible with money, you need to be responsible with money yourself.
You should talk with them about your own financial goals, how and why you make certain financial decisions – or sacrifices during tough times – and make sure they understand why it is important to save money. You can also involve them in your own budgeting and saving process so that they can see how you manage your finances.
By setting a good example, you will help your child develop healthy financial habits that will last a lifetime.
7 Ways a Teacher Can Teach Their Classes About Money
As a teacher, you have the unique opportunity to help shape your students’ understanding of money and financial concepts. You can help them develop healthy money habits that will last a lifetime.
There are many ways that you can teach your students about money. Here are just a few ideas:
1. Incorporate money lessons into your existing curriculum
You can integrate money lessons into your existing curriculum, such as teaching math concepts using money examples. For example, you can have students calculate how much money they would need to save over time to reach a specific goal, such as buying a new toy or saving for a rainy day.
Another way to do this is to integrate a reward system into the classroom and have students keep a daily or weekly budget for their spending. This will help them understand the importance of making responsible financial decisions.
For instance, you can give them a set amount of “money” each day or week, and they have to budget their spending. If they spend all of their money on one day, they will have to wait until the next period to get more. This will help them understand the importance of delayed gratification and money management.
2. Use games and role-playing to teach money concepts
Games and role-playing are fun ways to teach your students about money. You can use board games, card games, or even create your own game to teach specific money concepts. For example, you can use Monopoly to teach about saving, spending, and investing money.
Another idea is to have students role-play different money scenarios, such as going to the bank or grocery store. This will help them understand how to use money in real-life situations.
3. Show them how to save and invest money
It’s important for students to understand the importance of saving and investing money. You can show them how to set up a savings account at the bank and how to start investing in stocks or mutual funds.
You can also have students create a mock stock portfolio and track their investments over time. This will help them understand the ups and downs of the stock market and the importance of diversification.
4. Make use of money-themed books and materials
There are many great children’s books about money that can be used to teach important concepts in a fun and engaging way. Some of our favorites include:
- The Berenstain Bears: Trouble with Money by Stan and Jan Berenstain
- Don’t Throw That Away! by Lara Bergen
- The Penny Pot, by Stuart J. Murphy
- Follow the Money! by Loreen Leedy
- Arthur’s Funny Money, by Lillian Hoban
5. Use real-life examples
Use real-life examples to illustrate money concepts. For example, if you’re discussing saving money, you can talk about your own personal experiences or share a news article about someone who saved up for something special.
If you’re discussing spending money, you can take your students on a field trip to the grocery store or mall and have them price items and compare prices. This will help them understand the importance of getting the best value for their money.
6. Teach good finance principles throughout the day
When it comes to teaching kids about money, it’s important to be creative and find ways to incorporate lessons into your everyday routine. For example, you can start each day by having students tally up the previous day’s earnings and expenditures in a journal.
End each week with a review of the student’s journal entries and help them develop a plan for the following week. This will help them develop good financial habits early on.
7. Make it fun!
Finally, make it fun!
Money lessons don’t have to be boring. There are many fun and interactive ways to teach your students about money. Use games, activities, and real-life examples to make the lessons engaging and enjoyable.
If you make it fun, your students will be more likely to remember the important concepts and develop good financial habits that they can use for the rest of their lives.
13 Tips for Getting the Conversation Started
Talking about money can be tough for parents and teachers alike. It’s natural to want to protect the children in our lives from money troubles and teach them how to be responsible with money, but sometimes it’s hard to know where to start. Here are a few tips to help you get the conversation started:
1. Talk about money often
The more you talk about money, the more comfortable your kids will be with the topic. Try to work money into everyday conversations whenever you can.
2. Be a good role model
Your kids are watching everything you do, so it’s important to set a good example when it comes to money. If you’re always spending recklessly or arguing about money with your partner, your kids will pick up on that.
3. Use age-appropriate language
When you’re talking to kids about money, it’s important to use language that they can understand. For younger kids, that might mean using simple terms and examples. For older kids, you can start to get into more complicated concepts.
4. Be honest
It’s okay to admit that you don’t know everything about money. If your kids have questions that you can’t answer, do some research together or find someone who can help.
5. Encourage questions
It’s important to encourage your kids to ask questions about money. That way, you can be sure they understand what you’re teaching them.
6. Keep it positive
Money doesn’t have to be a taboo topic. Talk about all the good things money can do, like buying presents for loved ones or going on fun vacations. Then, when you are planning your next vacation, show your child how you are saving up for it.
7. Find teachable moments
There are lots of opportunities to talk about money in everyday life. For example, you can discuss the cost of items when you’re grocery shopping or talk about how bills are paid. You can show them how coupons work or help them compare prices online.
8. Make it fun
Learning about money doesn’t have to be boring. There are lots of great resources out there that can make learning about money fun for kids. Look for games, apps, books, and websites that teach kids about money in a way that’s entertaining and engaging.
9. Get started early
The sooner you start talking to your kids about money, the better. But it’s never too late to start. If you didn’t have these conversations when they were younger, it’s still important to talk to them about money now.
10. Keep the conversation going
Money is a complex topic, so it’s important to keep the conversation going as your kids grow. As they get older, you can discuss more complicated concepts like investing, credit, and budgeting.
11. Help them make smart decisions
As your kids start to earn their own money, whether from allowance or part-time jobs, help them make smart decisions about how to spend and save it. Teach them the importance of giving back, and let them know that you’re always available to answer any questions they have.
12. Reward good behavior
When your kids make responsible choices with their money, be sure to praise them for it. This will encourage them to continue making smart financial decisions.
Teaching kids about money can be a challenge, but it’s important to start the conversation early. By using age-appropriate language and finding teachable moments, you can help your kids learn about money in a way that’s positive and fun. Most importantly, keep the conversation going as they grow older so they can continue to make smart financial decisions.
Teaching your child about money is an important part of their education. By teaching them about budgeting, spending, and saving, you can help them become financially responsible adults. Use the tips above to help you get started. Let us know in the comments if you have any other suggestions.
Happy money teaching!