There comes a point in every child's life when they realize that book bags and candy bars don't magically appear out of thin air. When this moment arrives, it's important to open a dialogue about money. The way you teach them when they're young will have ripple effects on how they manage their bank accounts in the future, so here are just five tips for starting a conversation about financial responsibility.
1. Play Games
Sit your child down for a lecture about personal accounting and they may or may not remember what you said three days later. Sit them down and play a game of Monopoly, however, and they'll learn all about saving, investing and spending within your means, no lecture required. Games that stimulate financial thinking are a great way to introduce your child to the concept that money is finite.
Here are a few others you can play for the same results:
2. Bring Money Into Everyday Activities
Many parents don't think of the amusement park as a learning opportunity, but with the right planning, it can turn into a real teachable moment. For example, give your child a certain amount of money and explain that it's all they have to spend for the entire day. Do they use it for games, rides or souvenirs? Do they exchange sodas for water to make their lunch budget stretch? Would an all-day pass be a better investment than paying for each roller coaster individually?
3. Give Them An Allowance
Most kids won't understand the value of money until they actually have it in their hands to spend or save as they see fit. You'll want to give them an age-appropriate amount, of course, but otherwise the sky is the limit in regards to how they earn it and how often they receive it. You can drive the lesson even further home by having a weekly discussion about the following topics:
- How much they have left- What they'd like to save up for- How long it will take them to reach their financial goal- How much they'd still have if they hadn't spent their last allowance frivolously
4. Involve Them in the Family Finances
This is an excellent way to teach them everyday financial skills that will come in handy as they grow older. Young children can practice their arithmetic as you add up the monthly bills together; preteens and adolescents can learn about checks, taxes and credit cards. Once they've demonstrated a certain degree of financial wisdom, you can allow them to open their own savings account or take out a student charge card. The goal is to prepare them for handling their finances independently by the time they're eighteen and headed for college without your supervision.
5. Get Connected
It's the 21st century, and many children learn how to operate a smartphone before they can do long division. You'll need to be hip to the trends if you want to impress financial responsibility on them in a way they can understand.
Here are a few good websites where kids can learn about money:
Here are a few noteworthy apps:
There are many more, of course, but these should at least start a conversation about money.
At the end of the day, your children will look to you when it comes to financial literacy. Your example is the one they'll emulate; your lessons will be the ones they remember through adolescence and adulthood. If you're serious about teaching your little ones the value of a dollar, follow these tips for the best results.
Jessica Kane is a professional blogger who focuses on personal finance and other money matters. She currently writes for Checkworks.com , a leading supplier of personal and business checks.