When it comes to parenting, there are many essential lessons to pass along to your children: work hard, be kind, and give back, among many others. But one of the most crucial lessons involves financial knowledge. Parents want their kids to grow up and have the financial know-how to ensure they can live the life of their dreams — or at least be comfortable as they go through the many stages of life. And to do that, you need to be smart with money.
When it comes to finances, it’s never too early to start teaching. Whether it’s through games, apps or real-life experiences, here are a few different ways you can impart financial knowledge — no matter what their age.
Have conversations.
It all starts with talking openly to kids about money. Explain that money is something earned by working, and that almost everything in life costs money. If you’re comfortable, include kids in conversations about the family budget, so they know that their favorite creature comforts — think phones, cable TV, toys and desserts — aren’t free, and come as the result of hard work.
Use cash.
These days, it’s all about credit and debit cards, online transactions and automated payments. But not having dollars and cents that kids can hold can make the concept of money seem more abstract — and like money is just always there, available and free to spend. When possible, have dollar bills handy for kids to earn, spend and set aside for savings. In addition to seeing the dollars and cents accumulate visually, it will teach them that the best way to buy things is with the money that you already have.
Use games.
Make learning about money fun with a board game! A wide range of games are available for nearly all age levels, helping kids learn about saving, spending and investing. For young kids, look for games that involve simple counting and money management skills. For elementary school kids, find games that involve decision-making around finances to help them apply money in real-world situations. And for older kids, opt for games that teach next-level, real-world skills like stock market investing, starting a business, and getting out of debt.
Use apps.
Thanks to modern technology, kids can get hands-on financial experience through different apps. From apps that allow kids to funnel their allowance into categories like spend, save and give; to apps that help them set and achieve financial goals; to apps that allow kids to try their hand at investing or the stock market, new tech allows for real-world experiences with many different financial skills. As an added bonus, most apps allow parent access as well, letting adults support kids as they develop a healthy approach to managing their own money.
Set a good example.
Children learn what they see. So when it comes to teaching kids about money, it’s critical to set a good example. When adult family members are shopping smart, working within a budget, making tough financial choices and planning for the future, kids notice. Just remember: practicing good financial habits not only positively impacts your family now, but the impact will reverberate into the next generation and beyond.
Allow them to start practicing.
When it comes to money, it’s the real-life lessons that stick the most. If possible, help kids find a way to earn extra money — whether it’s through chores at home or a part-time job —and then sit down and talk through the idea of spending, saving and donating. When kids are in charge of their own money, and have worked for it, they’ll truly understand the value of a dollar. And when they apply their own money in the real world, they’ll quickly discover what it feels like to spend, save and give — and carry that through into the future.
