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

Set up a Savings Account or UGMA Accounts for Your Child

At birth, we set up savings accounts for our children. This is a savings account to hold the money gifts the children get for birthdays and special events have a place to go. It simplifies life so I do not have to remember what mooney is for them separate from our main household funds.

UGMA accounts are a way to accumulate savings for a minor child while allowing it to grow for them as they grow. If you set up UGMA accounts for your children, teach them how to invest as they get older. Teaching our teens life skills like investing and budgeting are important parenting steps.

My oldest 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 wanted 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. As he gets older, if he chooses to not go to college, then when he turns 18 he will take over management of the account. At that point I hope we have taught him how to be smart with money. It is our job as parents to teach that. And, here is how to do it.

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?”

Then, as I became an adult, the shared about opening up an IRA account. Just doing that gave me the opportunity to start investing and learning as I went. When I got married, I used this home budget to manage our household income and spending. We still use the same spreadsheet help us stay on track and I have helped my son set up a budget as he gets closer to having his first job and turning 18. He will know what to do to track his income and expenses.

Don’t Buy New Toys Every Shopping Trip

Assign Your Child Chores

Don’t Be Afraid to Answer Your Child’s Questions About Money

Be A Good Example

This post is featured in A Complete Guide for Stay-at-Home Moms: Parenting Tips. To view all the articles shared, click here.

 

 

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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