5 Tips for Teaching Your Kids About Money

It might seem like an impossible task to successfully teach your children about money when you’re still struggling to do so as an adult. If you could hop in a time machine and relearn your lessons about money, what would they be? Since this is a critically important part to everyone’s life that starts in childhood, let’s explore some tips for teaching your kids about money and creating a positive money-mindset starting in tot-hood.

1. Encourage them to think creatively to earn money

Often warned against never using the words “we can’t afford it,” around your children, parents often still do this a simple way to explain their “no” to whatever new toy the youngster is after. Instead of taking the easy way out, however, it’s much more beneficial to encourage your children to earn the money required to purchase the item they want. Think bake sales, neighbourhood lawn mowing, or hosting a garage sale as an overall win-win for everyone.

2. Create three jars for saving, spending, and sharing

Instead of just handing your child a lump sum of allowance every week or month, no matter how nominal the amount might seem to you, start to teach your kid the important lessons of divvying up funds by creating three jars: one for saving, one for spending, and one for sharing.

3. Explain your financial decisions

One of the best tips for teaching your kids about money and helping them to grow into financially responsible adults is to actually include them in your money making decisions. While you are encouraged to keep money stress conversations at bay, offer them explanations as to why you choose certain products over others. Point out sales items while grocery shopping, and ask them to help you find good deals.

4. Allow them to do their own banking

Get your child comfortable with banking by physically bringing them with you to the teller, allowing them to observe the process and encouraging them to ask questions. Once they are old enough, open them a bank account and allow them to do their own banking without you present.

5. Explain the benefits of saving

Now that they are really starting to bud into young adults, start telling them about the benefits of saving, like compound interest. Draw out a scenario involving something, perhaps a vehicle, that they want to purchase, and pique their interest with the opportunities involved in saving for long-term investments.

Voila! 5 Tips for Teaching Your Kids About Money that might just be the difference in them growing up to be financially-literate geniuses. And hey, if they can do it, you can too!