Teaching kids about money and how to budget can seem like a daunting task. You can teach children at any age about earning, saving and spending money. If you start at a young age, you can add on even more money lessons as the kids get older. Giving your children these skills will not only help them understand money now, it will benefit them the rest of their lives. Remember that budgeting is not just taught in school, so make sure to empower your children with this knowledge.
Tips For Teaching Kids About Money & Budgeting
These tips for teaching kids about money and budgeting are focused mostly on younger children, but you can easily adapt to your kid’s ages and understanding level.
Give them an allowance
Most experts agree that having some kind of allowance is a good starting point for money matters. A good guideline is to pay one-half to one time the age of the child. For example, a 3 year- old would get $1-3 and a 10-year-old would get $5-10 per week.
Make them donate some of their earnings
One great way to begin teaching kids about money is to make them not just earn, but be responsible about how it is spent. You can setup 3 containers like a simple jar with a chalkboard label (any tub, jar or plastic container works). Label them ‘Saving’, ‘Giving’, and ‘Spending”. How you divvy up the money is up to your family. You can pick the percentages you would like to use. Some parents like to split the “Spending” bucket into 2 containers. Your child can have a short-term ‘fun money’ for spending, as well as a separate spending container to save up for something they want to buy that may take a while to save for.
Include them in family budgeting
Another great way to begin teaching kids about money is to include your children in some of your financial discussions. No, your younger kids do not need to be involved and worried if you have some financial challenges, but if you are saving for a vacation, maybe discuss it as a family. Let the kids know that the whole family is saving towards a big goal and that there will be fewer trips to McDonald’s, or just less spending on extras. Your kids will be sure to remind you when you are thinking about that Starbucks coffee during a shopping trip at Target.
Teach them to wait and research
When the kids want to buy something with their spending money, teach them by example about researching the best prices. Show them when you go shopping how you compare prices and make sure you are getting the best deal. Since they are spending their own money, they will be happy to learn this skill and make their funds last longer!
No matter your personal approach, take the time to teach kids about money and budgeting. You want them to grow up to be savvy and self-sufficient, so don’t forget this important life lesson. Someday they WILL thank you! Teaching kids about money isn’t a tough job, but it is important for their future!