You want your little ones to be skilled at managing their own money in the future—but how should you begin teaching them about financial responsibility? Start by helping kids observe and calculate the exchange of money from an early age and by asking for their opinion when you’re getting ready to make a purchase—big or small.
From introducing the concept of money to making their first investment, here’s a roadmap to guide you through the process of your kid’s financial education.
1. Oink, oink. Introduce young kids to coins first and encourage them to save their coins in a piggy bank. Use a clear piggy bank or jar so that kids can actually see their pile of money grow.
2. Weekly allowance. When it comes to an allowance, many parents believe that every cent should be earned and linked to chores. Others believe it should be partially earned and partially gifted. Whatever you decide, when kids receive an allowance they must learn very basic budgeting and rationing skills.
3. Make learning fun. Play money games that encourage learning. Board games, online games, and homemade games are all possibilities.
4. Small mistakes. Let your kids make their own spending decisions, even if it means making mistakes and wasting their money. However, be ready to step in and help guide them when they need it.
5. Set goals. Encourage your kids to set a savings goal and work towards it. Remind them of that goal when they are tempted by other purchases. Teach them to choose wisely.