Kids grow up fast, and there are countless moments you don’t want to miss. With careful planning, teaching your children about finances can be just as fun as any other activity – and much more beneficial. Studies show less than 25% of children regularly discuss finances with their parents, leading to anxiety about money and mounting debt in their futures. Here are a few tips to make it easier for them to learn about finances.
Make Money Digestible
Instead of giving your kids long lectures about family’s finances, find moments to highlight financial information in a casual, accessible way.
Having a family dinner? Use that time to discuss eating in versus eating out and how important it is to budget for weekly grocery expenses. Waiting for the popcorn to pop before starting a weekend Netflix binge? Talk about how streaming services and other recurrent expenses add up over time. Use small moments like these to teach focused, non-judgemental lessons.
Make Them Earn it
Allowances are a staple of childhood, but just giving your kids cash every Friday doesn’t incentivize them to value that money.
Don’t give your kids an allowance; provide them with a commission for completing a job. Give them a list of tasks they need to complete before they are paid, such as cleaning the house, cooking dinner, washing the car, and so on. Making your kids actively work for their allowance shows them that money requires effort, and things that require effort are treated with respect.
There are plenty of apps that can turn learning about money into an activity you can both enjoy. Greenlight, GoHenry, and Savings Spree are just a few examples. Give one a try.
Show the Savings
Kids like instant gratification. If you give them money, it probably won’t be long before they spend it. This makes conversations about savings a nightmare for parents, but there are ways to make your kids want to save.
Start simple; have your child put their earnings in a clear container. This way, they will see their money grow bit by bit. Build on that growth by promising your children bonuses for reaching savings milestones. That way, they can visualize their savings goal.
In the end, it’s all about teaching your children that the far-off benefits of saving money for later are better than spending money now.
Money Doesn’t Grow on Trees
Have you ever been to a toy store with your child? They put one toy in the buggy, then another, then another. They don’t consider the price tags of all those toys adding up, so it’s important to teach them about spending limits and making tough decisions. Next time you go to the grocery store, give them $5 and coach them as they try to settle on what to buy. Use this as a teachable moment and show them that money spent here means that money can’t be spent there. Teaching your kids to set limits can help them down the line when they start receiving credit cards in the mail.
Lead by Example
If you teach your kids the importance of frugal spending, but you’re constantly overspending with credit cards, they will notice. If you only pay them when they do chores, but you talk positively about get-rich-quick schemes, they will notice.
Giving your children a solid financial framework to build on takes time, dedication, and patience, but if you invest in teaching them when they are young, it will pay dividends in their future.