Teaching children money management is one of the great skills I learned from my parents was money management. Lessons such as how much money it takes to buy certain things, how to set up a budget, being mindful that what goes out better not exceed what comes in, and self-esteem from inside, not from accumulating ‘stuff’ on the outside. These are linked, but separate skills, that can be taught to our children while they are young without needing a degree in Finance or any degree at all.
Here are 6 tips for teaching your children about money, budgeting, and that while love is free, stuff is not!
6 Tips for Teaching Children Money Management Skills
1.) Discuss money and income
My parents often discussed their income and money in general at the dinner table. We did not need to schedule a family meeting, because most nights we had one while eating together. It was natural, it was just what we did. My brother and I asked questions to chime into the conversation and were respected and trusted enough to be given the answers to questions we had: “How much money do you make?” “What does a car cost?” “Why can’t we get a toy when we go to the store?”
2.) Don’t buy new toys every shopping trip
3.) Assign your child chores
4.) Set up a savings account for your child
At birth, we had an account set up (just a simple savings account,) so that money gifts and our additional savings for his (hopefully) future college had a place to go. My son is already learning that work when completed well = pay and pay gets saved FIRST. (Ever heard the line: “Pay yourself first?”)We did not start allowing him to use his allowance money to buy things he wants until around 6 years old. We teach him about donating 10% and saving 10%, first. We encourage him to save everything “for college” for now. His basic needs and more are met by us and extended family for the time being.
5.) Don’t be afraid to answer your child’s questions about money
6.) Be a good example
Love is easy to give, and does not cost a dime, but many things in life do cost dollars and cents, and we should teach our children this vital lesson.
Grab your free download home budget template to get started focusing on your household savings and spending today!
For more about creating a household budget: Become the Master of Your Home Budget.
Need tips for getting your children started with chores? Money Lessons Through Chores
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