Six things to teach your kids about money
We all want the best for our kids. We want to pass on our best characteristics and strengths and spare them the mistakes we made over the years.
Teaching children about money and instilling good money habits from a young age, sets them up to be wise with money and manage it well. Remember that kids learn most from what we do, not just what we say. Make sure you “practice what you preach” when it comes to money!
Here are six things you should be teaching your children about money, right from the start.
What to teach your kids about money
Generosity
My greatest hope for my kids when it comes to money (and time), is that they are generous. It is a value I really want to instil in them.
It is so easy to be greedy in today’s society, to want more all the time and to never be satisfied. Greed does not bring contentment. I don’t want my kids to buy into believing that money brings happiness or that it is the goal of life. I want them to be generous, to see money as a tool for good, not as something to accumulate and keep for themselves.
Teaching kids to be generous is also about teaching them not to be greedy. To not constantly expect (& desire) new and better things. Help them to focus on others, to give with their time and their money to those in need, not to focus on “things” but rather on relationships.
Saving
In our world of credit cards and fast loans, saving has gone out the window. We want it all and we want it NOW! Many teenagers wouldn’t even know what lay-buy is, and most adults happily stick something on the credit card rather than saving.
Teach your kids to be patient, to save for something that want. Help them to understand the value of money (and the things that money buys!)
I’d encourage you to have your kids put away small amounts of money each week if they get pocket-money or to learn to “save” via earning rewards (even if non financial) for things they want.
Budgeting
Helping kids to understand the concept of money in/money out is a hugely important aspect of their future money management. Many adults have no idea of how much they earn vs what they spend and this is a major contributing factor for the amount of debt we are in as a society.
Teaching budgeting can involve showing your children how much there is to spend on a particular area and getting them involved in choosing how to make that work. You could take $20 to the supermarket and explain they need to create a meal for that amount. Help them see that spending over the budget is spending money you don’t have (or that you need the money to come from somewhere else). This can also help children to be grateful and have patience when it comes to items they want.
Research & bargain hunting
I am always amazed at the number of people who will walk straight into a store and make a large purchase without doing any shopping around, comparisons or research. I’m not talking here about bargaining a business down to their lowest price but simply looking into available deals and comparing pricing. Price won’t be the only factor but you should know what you are paying for and whether you’re paying too much.
The same goes for everyday items. Consider buying in bulk when things are on special. Teach your kids about sales and how they work. Explain to them why it is sometimes worth waiting for an item to come on sale rather than buying it right now.
Investing
Along with saving, helping your kids and teens to have a basic understanding of investing is a really wise investment (;)) in their financial future. Help them to understand the concept of risk and some of the options for investment out there. It might be an area that you could learn about together if it isn’t something you are knowledgable on.
Avoiding scams
Unfortunately with more technology and the increased emphasis on it, there are now more scams out there than ever. Teaching older kids and teens about some common hallmarks of scams is an important part of helping them to be wise financially. Ultimately, if it looks “easy” or too good to be true when it comes to money, it probably is!
Do you talk to your kids about money? What advice do you have?
Budgeting is big for me. I think kids get so much these days and the value is taken away from them (value of anything). I once said to my son at swimming “You can get chips or a drink, I don’t have enough money for both” (a constant refrain) and my friend’s mother was next to me and she said “oh I can give you money”. After a pause (and a pointed look from me) she realised “Ah, that wasn’t the point of that was it. Good for you!”. I don’t think it’s bad to let kids know that everything comes at the cost of forgoing something else.
I tell my boys the same thing. At the end of the day there has to be a limit!
Nice! I would also add debt as a number 7, and perhaps it is linked to Lydia’s point above. We gave our kids pocket money from an early age, it was theirs to spend on (almost) anything they desired. There were mistakes and frustrations at the start. Once my four year old returned an impulse bought cheap toy to the toy shop because he was worried it would break the first time he played with it. They gave him his $5 back – I hardly helped with the negotiation. We also let our kids borrow against their pocket money at times when they were impatient to buy something – with the knowledge they’d have to pay back more. My kids have also lent money to each other. Debt is not taboo if you prioritise paying it back.
And if a brag is allowed, we are into our second year of ‘no presents’ birthdays and events, spending money on experiences rather than stuff. It’s not a hardline rule for us, but already they understand that happiness doesn’t come from material possessions.
Hi Jodie,
I actually did think about adding debt but wondered if it worked for young kids. Definitely for teens. I think understanding “good debt” vs “bad debt” is also really important.
Gifting experiences is such a great way to still give but not have it be all about “stuff”. We do the same!
Great tips! I love the food shopping idea. I remember being horrified and shocked the first time I went to buy food at the supermarket with my own money.
#brilliantblogsposts
Yep I remember the look on my sons face when he realised how much money from his piggy bank he would need for just one freddo! It was in 5c, 10c and 20c pieces but it had a real impact.
I think i have seen work is to talk and discuss about the ads, i usually criticise ads and get my both boys involved, I usually ask them if they can see how the ads are trying to sell you and if they need the product it’s just a way to show them need vs want.
That’s a great point. It is so easy for kids to get caught up with what they see on TV. Helping them to understand them and be critical is a great skill.
Teaching kids about finances is so important, but is always a forgotten subject.
Yep it is so easy to overlook it until it is too late!
Nice post! As I’m not yet into that kind of problem I didn’t think about it. I have some savings that I make for their studies but even Miss 9 isn’t aware of what does it mean. She never asked for pocket money and only got some from the lost teeth (do you also have the little mouse that takes the tooth and leave a coin?) and when I need some money for bread she’s always happy to give me some. Meaning for me that she isn’t yet into that bying society. I’ll have to be careful in a few years I ‘m sure! xx cathy (ps found your post through the rabbit hole)
Hi Cathy,
Yeah I think when they are little it is more about encouraging generosity and helping them understand they can’t have everything. Thanks for stopping by 🙂
A very timely post Michelle. My little Miss wants everything she sees on TV ads at the moment and is learning that money doesn’t grow on trees. The few school fundraisers they have held this year have been a great way to teach them to be generous. We’re not yet at the stage of giving pocket money but it’s probably not far off. Lots to think about… Thanks for sharing! (And for linking up to the ultimate rabbit hole) xx
Great ideas you mentioned , I think an important one is that everything must be bought before being consumed – i’ve seen so many people open things before they pay (or not) for them. It sends the wrong message to kids.
Really valid, useful points here. I’m due to post about our little bear’s pennies very soon and one of those points will be to open her a bank account. #brilliantblogposts
I’m big on researching and shopping around so I hope my kids learn from example on that. We started dollarmites savings this year which is just great and every year we let the girls pick some charities to give to and we go right into the story behind it with them. There are so many valuable lessons for them to learn around money.
Thanks for these tips, they are all things to think about as my kids get older. We haven’t started pocket money yet, but it is coming…
We try to be as proactive as possible with teaching our boys about money. It can be difficult but they’re slowly getting it. And actually I think my youngest son gets it more than the oldest! Great post.
I talk about money to my 3 year-old. He has a money box which we clear out if something is happening like we are going to a theme park and then he can pick something worth that amount (I switch the coins to notes in front of him) and he pays for it himself. I try to get him to understand that things cost money. This post had so many more aspects that I hadn’t thought of.
Yes, we all want to give best to our kids and wish, they grow with value of money. We have to teaching kfids about money and its value age by age .