Teaching kids about money is an important life lesson for children. It is foundational to their financial security and success later in life. I remember when I was in elementary school and the local bank came to visit. They taught us about a basic savings account, how we can use it to save money we earn, and how to keep track of our spending. We also learned how our money can grow in an interest savings account, as well. I never forgot that day, and later in high school we learned how to write checks and balance a checkbook. Simple lessons like these can help prepare children to be more responsible with their money, as they will quickly learn how to budget, save, and spend wisely. Let’s dive into some of these topics now.
Earn Money
First off, in order for children to save money, children must earn money! How can children earn money?
- Allowance: Parents and/or guardians can offer an allowance when household chores are completed.
- Services: Children can also earn money by offering services in their neighborhoods like yard work, raking leaves, mowing lawns, or weeding the neighbor’s garden.
- Pet sitting: I did this as a kid. I would care for pets while the owners were away. It was fun, too!
- Business: A popular way kids earn money is through small business ventures like lemonade stands or selling handmade crafts like bracelets or baked goods (with adult supervision, of course!).
Now that money has been earned, it’s important to save it. Let’s dive into how that can be done easily in the next topic.
Save, Save, Save!
- Piggy Bank: Using a good old fashion piggy bank can help children visually see their money grow. It may be hard to see inside a piggy bank, but when it gets full, children will definitely see how much they can save if they don’t spend it for a time! Also, when it is time to crack it open, it will be a great lesson on counting money and learning about sums.
- Online Savings Account: Help your child open a youth savings account, and every time a child deposits money in the bank they can go online to see their balance (with adult supervision) and all the deposits made. The visual of watching their balance grow can be exciting and motivating to keep up the good habits of saving money.
Set savings goals: Help your child work towards a specific goal, like a new toy or a video game.
Now that there are savings goals, let’s move on to spending that money. Children will find it fun to save their money and watch it grow, but it is even more fun to spend it on things they want! It gives them a sense of indepedence and responsibility. Let’s dive into spending habits next.
Spending Wisely
- Budget: Sit down with your child and help them make a list of wants and needs. Examples of a want would be toys, video games, and special sweet treats (i.e. ice cream!). Examples of a need might be things like a backpack for school, special clothing, or shoes.
- Compare prices: Teach your child to look for sales before making purhcases, such as looking online at the price of an item from several stores. Doing this helps them stretch their money further and spend less. A great life lesson!
- Borrow instead of buy: Borrow books from the library, rent movies, or borrow toys from friends. A great way to keep saving your money while getting the things they want or need. Borrowing is also great because the items in question, such as a book or a specific age appropriate toy, are things that your child will grow out of quickly. No use spending money on it if you can just borrow it for a period of time.
- Find free entertainment: Visit parks, go on nature walks, have picnics, or enjoy board games.
- Avoid Impulse Purchases: Wait 24 hours before making a big purchase. Wait a day to see if they still want it. Also, Think long-term. Help your child consider the value and long-term use of an item. This goes back to borrowing. Is the item for temporary use (book, magazine) where they could borrow it and return it at no cost, or long-term use (computer or tablet) where the investment is worth it?
Donate!
- Donate to charity. Encourage your child to donate unused toys or clothes to a local charity. Helping others in need helps children learn about the value of giving and helping their communities. Children can also help a local animal shelter or food bank by donating food, money, or supplies.
By following these tips, kids can learn valuable money management skills and develop responsible spending habits.
