Money and finances are topics that we always worry about, but sometimes have a hard time talking about these issues with our kids. Perhaps we don’t know how, or we feel embarrassed to discuss it, or we simply don’t want to worry our children. However, teaching kids about money and how to manage personal finances is important.
It’s important for our kids to learn how to be responsible and we need to start teaching kids about money early on.
10 tips for talking to kids about money and savings
Here are several tips for teaching kids about money and the importance of having savings.
- Teach your kids that they must learn to earn money, save it and then, only then, one can spend it.
- Explain the difference between wanting and needing. It is essential that your children know how to distinguish the essential from the superfluous.
- Stress how important it is to not spend what you don’t have.
- Instill that when you need to buy something important, you need to save to get it. Delayed gratification is undervalued these days.
- Explain that you should not use credit or debit cards unless you have the money saved in the bank to pay for what you buy. When discussing credit cards with teens, explain that the healthiest way to use a credit card is to treat it like a debit card.
- Start young. Explain the value of money early on. It also helps to teach them math concepts. For example, you can ask kids to buy something with cash and bring you the change. Then, discuss how much it cost and how much money was leftover. Make them count the coins or bills so they can visualize the amount.
- Play with pretend money. Monopoly is excellent to teach us all how to save, how to generate revenue and the basic rules of money exchange.
- Take advantage of technology. If you and your child like to play with apps, take advantage of everything you can install on your smartphone to learn how to do a budget. Even the calculator is useful to learn how much we should spend and how everything adds up. You can also tell kids to write down everything they spend so that at the end of the week, they can add the amounts and see the total.
- Consider giving a weekly allowance to your children. This teaches them to be responsible for a sum of money, no matter how small. They also start learning how savings add up.
- Teach children the value of work. If they go above and beyond their usual chores, allow them to make a dollar or two. It’s not about paying children for the chores that must be done daily, but rather rewarding them for the extra effort. For example, if your child vacuums your car, you can give him the chance to earn a dollar and save it. That way he will be proud of what he has done and see that the work pays off.
Do you have any other tips to start teaching your children about savings and hard work? Is it tough for you to bring up the subject?