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How to Teach Kids About Money at Every Age

How to Teach Kids About Money at Every AgeIt is hard to teach kids about money. When you are a kid, you don’t really think about where things come from. You just expect them to be there.

Of course, as you get older, you gradually get a better understanding of how money works. Plus, you learn that you have to have money in order to buy the things you need.

Now that you have kids of your own, it is natural to want to teach them about money as proactively as possible. With the right approach, you can give your kids a powerful understanding of the importance of money.

An Early Lesson

One of the first places you can teach kids about money is the grocery store.

It is common for kids to go along with mom or dad to the grocery store. Most kids love riding in the basket and watching the people go by. When you buy things at the store, make sure to point out that you have to pay for everything you are taking.

This lesson may even be understood by a child as young as three years old. Sure, they won’t get the full picture at such a young age, but you will be planting an important seed.

Adding Up the Budget

As your kids get into school and start to learn basic math skills, you can again use the grocery store to teach a lesson.

Before you go into the store, tell your child that you have a certain amount of money to spend in order to buy everything on your list. Then, as you shop, you can have them help you add up the cost of your items.

You can point out how picking one item over another may be able to save you a dollar or two along the way. When you reach the register to check out, the child can watch the total add up and see if you have done a good job of sticking to your budget.

Not only will this be great math practice, but it will also start to instill the concept of a budget and making choices on what you are going to buy.

The Allowance Stage

The real lessons about how to handle money are going to come when you start to give your children their own allowance.

It will be up to you to decide at what age it becomes appropriate to offer an allowance – after all, you know your child best. However, it is recommended to give them a certain set of chores that need to be completed in order to earn the allowance.

This is how the real world works, in terms of being rewarded for money based on the completion of a task. Once the allowance has been provided, you can explain concepts like saving, spending a certain portion of what you have earned, and how to accumulate money for a bigger purchase later on.

 

How do you teach kids about money? Have you done any of these things with your kids?

 

Photo courtesy of: taoheed_kasumu

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John Schmoll is a Dad, husband and veteran of the financial services industry. He's passionate about helping people learn from his mistakes so that they can live lives free from the shackles of debt and empowered to make their money work for them. You can check out his other sites: Frugal Rules, for ways to improve your financial literacy; and Sprout Wealth for tips on different ways to make more money. John has been featured on Forbes, Lifehacker, Yahoo Finance and US News & World Report and more. If you're wanting to grow your blog, check out my blog coaching services to see how I can help you take your site to the next level.

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