Helping Kids Understand Money

Growing up you swore up and down that you would never treat your own children the way that your parents treated you (insert dramatic tone of voice, crossed arms and a foot stomp for good measure). Your parents were awful and horrible and mean and you hated them oh-so-much. That is, until you grew up, had kids of your own and began to understand what your parents were doing (insert smug parental faces and raised eyebrows that say, “I told you so”). Now that you have kids of your own you want them to be kind, polite, funny, smart and always well-behaved. Unfortunately, they won’t be and you will, from time to time, wish that you could trade them in for a better model. Ultimately, you do love your kids, which is why you need to teach them to be wise with their money. Too many parents don’t think to teach their children about money, which can lead to a life of poor money choices; here are a few things you need to teach your kids now.

They Don’t Get Everything They Want

Sure, it would be so much easier to just buy them the toy they want in the store so you can continue shopping without listening to them scream, but all this does is teach your children that by crying they can get anything they want. Furthermore, you’re also teaching them that they can have whatever they want without working hard to earn it.

They Break it, You Don’t Buy it

You told them to pick their toys up off the floor last night and they did not. This morning, junior was running around the house and accidentally stepped on his favorite DVD, breaking it. Now he’s crying and telling you he needs a new one, which is just too bad for him. Not replacing items your children are careless with teaches them to value their belongings and that there are consequences to their poor behavior. By making him save up his own allowance to replace his favorite DVD he is learning the value of a dollar and that he should take better care of his belongings.

Money Does NOT Grow on Trees – Or in Your Wallet

Teens have a notorious habit of asking for money to go to a movie, take a girl out, buy a new shirt or whatever else they feel completely entitled to. Instead of forking over the dough every time they hold out their hand, teach them the value of hard work and money by making them earn theirs. Household chores or even a job of their own will teach them that it takes hard work to earn money and that will make them more responsible with it.

Teach Kids to Balance Their Own Checkbook

Even if your kids don’t have a bank account of their own, provide them with a checkbook and make them keep track of their money. Seeing where it goes and how fast it disappears will help them to understand the value of money. Additionally, make them save some. When their birthdays roll around, don’t let them keep every penny. Make them save half every birthday/Christmas/holiday. They make not like it now, but when they graduate from high school and go off to college they will thank you for making them save so that they have a nice little nest egg with which to furnish their new apartment or pay for books.