How to Teach Your Kids about Finances

In today’s environment, it’s more important than every to give your children a sound, financial education so they appreciate the value of money and know how to save and spend it in a responsible manner. Here are a few tips I’ve learned in teaching my son about finances that may help you:

Involve your children in financial decisions you’re making.

Talk to your children about your financial situation and be specific. Say, “we have $50.00 to spend on groceries and we’re going to buy X, Y and Z.” Then, visit a store and show them that no-name brands usually cost less than name brands.

Teach them to clip and organize coupons and let them be in charge of the coupons. Also, have them do some simple math problems adding up the cost of groceries, coupon savings and more. By having your children actively participate, they’ll learn more and feel like they have contributed to helping the family save money.

Work with an allowance.
Give your children an allowance for tasks accomplished and talk about how to save, spend and donate portions of it. By actually dealing with their own dollars, coins and budget, they will get first-hand knowledge of how to handle money. You’ll help them learn where money comes from and that by saving their allowance-funds, they can purchase the things they really want.

Open a bank account for your child.
Once you explain basic finances to your child, visit a bank and find out what programs the bank has for young savers. Open an account and help your child make deposits and withdrawals over time. Review monthly statements, interest payments and savings together and answer any questions your child may have.

You may even want to make it into a game and challenge your child to earn a certain amount by doing tasks around the house, depositing a portion of that money over time in the account and then offering to match a percentage of the amount saved.

It’s important to give your children a sound financial education at an early age. And if you need help, reach out to your local bank, financial institution or library.

After all, by learning about the value of money now, your children will form good habits to budget and control their finances in the future. Plus, they will have a nice savings started for a college education or other important activities in the future.

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