Worthwhile Ways to Teach Your Kids about Money
Here are some fun and worthwhile ways to teach your kids about money—how to make it, spend it, and save it. There are games and projects you can do together, personal experiences you can share, advice to pass along, and conversations you can have with your kids to make it easier for them to get along in the practical day-to-day world.
A good first step in teaching your kids about the exchange of money is that enduring American pastime called Monopoly. There are also lots of other money games to choose from such as Life, Payday, Moneybags, Careers, and many more. All of them are filled with clues on how to spend and invest wisely. You can find reviews of the games online if you like to do your research before making your purchase (a money lesson in itself).
The Weekly Allowance
Schedule a time to sit down with your children and talk about starting a weekly allowance. The amount and conditions can be discussed and are subject to negotiations that include hugs as well as handshakes. Although you don’t tell your kids how to spend their money, you should make it clear that the amount you’re giving them is going to last them until the same time next week.
Household chores are practical lessons in how to earn money. Chores can include things like washing windows, helping with yard work, taking care of pets, and helping clean the house. When they do a great job, make sure you let them know about it. If it’s not quite up to expectations, give them some pointers. As they say in motivational classes—feedback is the breakfast of champions. Start motivating early.
The First Savings Account
Open up a savings account for your kid at your credit union or bank. Start her off with a minimum balance. Give her the money so she can personally deposit it. Alliance Credit Union has a Dollar Dog Kids Club Savings Account that children can open with an initial deposit of $5.00 or more. Deposits earn compounding “dividends” (same as “interest”). Kids will learn about return on their investment and have fun watching it grow. They are also given a passbook where deposits and withdrawals are duly noted—very official and very fun.
What About Giving?
If you’re going to teach your child about spending and saving, it makes good sense to teach them about giving. You may want to discuss your kid’s concerns about the world at large and what they can do to make it a better place. Talk about what they can do about helping make schools better, feeding the poor and hungry, making sick people well again—and what about that guy standing over there at the side of the street with a cardboard sign that says “Anything Will Help”? What’s that all about?
The Money Machine
Unless you explain to your child about ATM’s, they’ll probably assume they’re money machines. It looks pretty easy. Put a plastic card in the slot and out slides the money. When you make a withdrawal from an ATM, you have a perfect opportunity to explain the difference between easy money and earned money.
The ABC’s of High Finance
Once your children get to know the basics of banking and are routinely beating you in Monopoly, you may want to go a few steps further and explore the A-B-C’s of high finance. Explain what it means to invest and why it’s a good idea to budget and set goals. A LeapPad or Huffy Pro Thunder can suddenly become more than a fantasy. Tell them the basics of stocks and bonds (if you’re personally involved). A U.S. Savings Bond can take on a life of its own if it has your child’s name on it.
As your children grow to become a tweeners and teenagers and young adults there will be other expenses such as telephone bills, iTune downloads, gas, and clothes. Because of what you’ve taught them, they’ll be more apt to handle these expenses by increasing their income and setting realistic financial goals. They may even still have their Dollar Dog Kids Club passbook notated with their earliest financial accomplishments. First steps that give you a foothold on the future are not easily forgotten.