Recently I was at a store with our kids, who had some holiday cash burning a hole in their pockets. After an hour of carefully examining every book, toy, game, and impulse bin item stocked, we made it to the register. The employee scanned the item our 6-year-old had selected and said, "That will be $19.97". In a very deliberate manner, our youngest opened her wallet and thumbed through the contents, and started pulling out random bills to hand over as payment. This was when I realized how much more I could do to teach our children about money and financial decisions in a tangible, hands-on manner.
- Start early! It's never too early to start teaching kids about money. Even young children can learn basic concepts, such as the difference between wants and needs and the value of saving.
- Use real-life examples. Include your kids in everyday experiences, such as shopping trips or giving an allowance, as opportunities to teach kids about money. Allowing our six-year-old to help as I created a shopping list, complete with coupons and totaling up what the final cost would be PLUS how much we saved, was eye-opening. We just happened to have a trip in the planning stages, so I shared that any money we save can be added to our travel spend. She was then on a mission to help me find more savings in places we went and spent money leading up to that trip.
- Encourage kids to save. Help kids understand saving by setting up an account and encouraging them to contribute a portion of their allowance or monetary gifts. We set up accounts through our bank that easily allow kids to receive money and allocate it between a SPEND and SAVE bucket, as well as set a limit for how much can be withdrawn from an ATM. We also encourage them to set aside a small portion to SHARE - either by giving to our church, our neighbors in need, or an organization the kids select together.
- Help kids understand the value of a dollar: It can be helpful to give kids a visual representation of the value of money, such as by using a piggy bank or by showing them how much things cost in relation to the amount of money they have. When younger kids ask to buy something, show them a $1 bill and tell them how many of those it would take to purchase that toy, book or new shoes.
- Lead by example: Kids learn by example, so it's important to model good financial habits yourself. This includes things like budgeting, saving, and being mindful of spending.
- Play to learn! Join your kids in some age-appropriate fiun that involves handling money. Set up a store and let the kids handle the selling, or pull out some family games that incorporate money and financial decision-making. Classics include The Game of Life, Monopoly and Pay Day and some new family games are ThriveTime (great for tweens/teens), Cash Flow and Money Wise.
Books to Help Kids Learn About Money
- "The Berenstain Bears' Trouble with Money" by Stan and Jan Berenstain: This classic children's book follows the Berenstain Bears as they learn about earning, spending, and saving money. This was my first book as a kid, and it is still on our family bookshelves today!
- "Alexander, Who Used to Be Rich Last Sunday" by Judith Viorst: This book follows the story of a young boy named Alexander who learns about the value of money after receiving a dollar from his grandparents.
- "A Dollar for Penny" by Julie Glass: This book follows the story of a young girl named Penny who learns about earning and spending money through a series of everyday experiences. This is a great early reader book for kids in first to third grades.
Books to Help Parents Teach Kids About Money
- "Smart Money Smart Kids: Raising the Next Generation to Win with Money" by Dave Ramsey and Rachel Cruze: This book provides practical advice for teaching kids about money, including how to set goals, save and spend wisely, and avoid debt.
- "The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money" by Ron Lieber: This book offers guidance on how to teach kids about money in a way that promotes good values and responsible financial decision-making. I enjoyed this book and used it as a guide for teaching our kids about money.
- "Raising Financially Fit Kids" by Joline Godfrey: This book provides practical advice for helping kids develop good financial habits and make responsible financial decisions.
- "Rich Dad Poor Dad for Teens: The Secrets About Money - That You Don't Learn in School!" by Robert T. Kiyosaki: This book, written by the author of the popular personal finance book "Rich Dad Poor Dad," provides financial lessons and advice specifically for teens.
