Finance may seem like a grown-up topic, but teaching kids about money management is a valuable life lesson – here are my tips on how your kids can learn to manage their money.
The value of money is something we should be teaching our kids from a young age. I believe teaching kids about money management is a valuable life lesson that they can take through to adulthood and when they start earning an income. Plus, I also feel it helps to avoid the phenomenon that seems to be happening lately of entitlement and kids believing they should just be handed every gadget under the sun. Don’t get me started on this topic!
I’m pretty strict with my kids in many aspects of raising them, but for good reason in the long run. Implementing the basics of money management, goal setting and budgeting while they’re young will prepare them for when they need to start making their own financial decisions. These 8 tips are simple but will help kids learn that money really doesn’t grow on trees!
1. POCKET MONEY
Giving children an allowance is a good way for them to start feeling independent and appreciating the value of money. It’s a fun and practical way to teach them the worth of notes and coins, as well as counting. You can choose whether to give them money with no strings attached, reward them once their chores are completed or a mixture of both.
READ MORE: Pocket Money – teaching kids value and responsibility.
2. MORE WORK = MORE MONEY
Make a list of jobs on top of their usual chores and routines. If they complete some extra chores, give them a bit of extra cash. This way, they will understand that they have to work hard and earn the extra money. So if they are wanting something, get them to start saving and doing a few more chores for a bit more extra money.
READ MORE: 50+ Age Appropriate Chores for Kids.
3. SPENDING THEIR OWN MONEY
When going out, encourage them to take their own money or pocket money that they have earned. If they spend all their money on something but expect something else, tell them they have to wait till their next lot of pocket money. This will show them that you have to wait and build up money. They will appreciate their independence and the importance on not relying on others for money. I believe letting them make their own decisions (and mistakes!!) is a more realistic approach and they can learn from these blunders.
My kids always enjoyed going to the movies and other places that all cost a pretty penny with their friends. They would have gone every week if I handed them the money and as we all know, it adds up. Instead, I didn’t mind how often they went but they’d have to use their own pocket money. That helped them to manage their money so they have enough for these occasions and to say no if they need to as they either don’t have the money or want to save it. One of my daughters used to take enough for a ticket and takes snacks from home to help reduce the cost.
4. SPENDING vs. SAVING
When you give your child a lump sum of pocket money, have them split it into ‘savings’ and ‘spendings’. These can be accounts or separate jars/tins. This will teach them that saving is a good objective and will introduce to them the habit of not spending all their money at once. Another great idea is having a charity jar to teach your child the gift of giving.
5. SETTING GOALS
If your child says they want to buy something, get them to write it down and the cost beside it. This way, they can learn how to save and watch their money can grow with a little bit of persistence and self control! The satisfaction they will feel when buying their desired gift after saving is a valuable life lesson. Children often like having the responsibility!
USE MY KIDS MONEY SAVINGS PACK – Use these charts to help the kids learn to save their pocket money for a particular item they are wanting. INSTANT DOWNLOAD FROM MY SHOP.
7. COUNT MONEY OUT
Get your child to help count out the cash for you when you get to the register to pay. This way, they will understand that everything costs money and will start to understand the value of items.
6. GROCERY SHOPPING
Take your kids to the shops with you and show them how to compare prices. Ask them to choose the cheapest item out for you or help them compare prices. This behaviour will demonstrate that you want to save your money through wise decisions.
LITTLE HELPER GROCERY LISTS – To make grocery shopping more manageable when my kids were younger I used to give them a little list of grocery items I wanted them to look out for during the shop. This helped to keep their attention. There are a few different name versions available, Nanna, Daddy’s etc. INSTANT DOWNLOAD FROM MY SHOP HERE.
8. SET A GOOD EXAMPLE
Our children are mini me’s and will copy our habits and actions. Involve them in your financial decisions. E.g. If you are saving up for a new dress or television, explain to them that you are saving and it takes time. Once you save, show them that you waited for your money to build up and that you were only able to buy it by putting a little bit of money away at a time, much like my Disneyland fund. View the tutorial here.
