If you have kids you know how expensive life can be! Raising kids is expensive. Let’s be honest… life is expensive. Nothing is worse than living your life in debt. Teach your kids to be fiscally responsible and how to save money with these money management for kids ideas. Teach kids the value of money from their youngest years.
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- Why Money Management For Kids Is Important
- Financial Responsibility For Kids
- The Truth Of The Matter
- 5 Ways To Teach Kids Financial Responsibility
- Teach Kids The Value Of Money
- Self Care, Productivity, Personal Growth and Healthy Mindset Coach
Why Money Management For Kids Is Important
Money management might not be your top priority with the craziness of being a busy mom. Even if you value financial responsibility and fiscal awareness it’s easy to let money management slip off your radar when parenting.
Your #1 goal in life as a parent is to give your kids the best life possible. Everything you do is to set them up to live a happy and productive life. You plan to make sure they have all of the things they need.
You probably even prepare them for life by exposing them to sports, hobbies and activities that will help them grow and celebrate their natural skills.
One thing most parents don’t think of (until your kids are teenagers) is financial responsibility. Money management for kids is one of the last things parents think of teaching.
For your kids to lead healthy productive adult lives they need to know how to manage money. If you really think about it, waiting until they are teens to start teaching financial awareness and money management isn’t setting them up for success. They have already started to form a relationship with things and how and when they get them.
Imagine if you taught your kids from the time they are small to have a healthy perspective and approach to managing money!
No, I’m not proposing you give your kids a spreadsheet or hang it on their wall when they’re babies. THAT would be ridiculous.
Below I’ve included several ways you can teach kids the value of money. My husband and I used all of these with our children as they were growing up. They understand how to save, make healthy budgeting decisions and aren’t intimidated by finances.
Financial literacy for kids is a critical learning experience that you want to teach them early in life.
Financial Responsibility For Kids
It’s important to teach kids the value of money, teach them money management skills, and build their confidence with life skills activities that become second nature to them.
Beyond the benefits to your children, you will be able to rest peacefully at night. You’ll know you took the time and put in the effort to set your kids up to live a happy and healthy life.
My experience on fiscal responsibility comes from my husband and I working diligently to establish ourselves after a very humble beginning and raising two kids that are now financially aware adults.
The most eye opening experience was teaching high school students though. Did you know that about 75% of kids in high school don’t understand the most basic financial literacy terminology?
The Truth Of The Matter
Most parents believe that financial literacy is taught at school. Technically, it is. What you may not realize is, your kids need to learn this terminology early in life and be taught to apply it practically on a regular basis.
Teachers are consistently asked to teach more educational standards over a shorter period of time and do their best to help every student master those standards. Like any other subject they will have students that excel and kids that struggle.
The question is, “Do you want something as important as your child’s financial awareness and stability to be left solely to the educational system?” School plays an important part, no doubt. BUT, is that the only perspective you want your kids to gain on their financial future?
You’re probably thinking, no way like most of us. You might also be wondering, “Where do I start?”
Don’t worry. There are some really simple ways to teach kids the value of money and help them with their money management skills.
5 Ways To Teach Kids Financial Responsibility
Below I’ve laid out several different ways to teach kids the value of money. All of them are valuable and have merit on their own.
Together, or some combination of them, is the best way to go.
Make Financial Literacy For Kids A Norm
When you’re talking about financial literacy for kids there are several things to keep in mind.
Your kids are going to draw from what they know. Regardless of what type of learner your child is, they will benefit from seeing, hearing, saying and doing whatever it is you are teaching them.
The trick is to make this conversation and the activities a norm in your home.
In other words, avoid sitting down for a formal lesson on financial literacy. They are more likely to be engaged in what’s happening if they don’t feel like you’re trying to teach them something.
After all, that’s what parenting is, right? You are teaching them all day, every day, whether you mean to or not.
Grab this free financial literacy sheet to reference when talking to your kids. Keep in mind kids of any age will embrace the terminology and be able to understand it if they are used to hearing you reference it.
Give Your Kids Daily & Weekly Chores
There are several different theories on whether you should pay your kids for chores or not.
That is 100% a family decision to make. Regardless of whether you choose to have chores for kids to earn money or give them positive reinforcement chores are a good thing.
Giving your kids chores helps teach them that things need to be done and they don’t just magically happen. Even if you don’t need them to do them now, you will appreciate it later.
Giving kids chores builds their work ethic from a young age.
Now, for the debate on whether to pay your kids for chores or not…
Here’s the thing. You, as a parent, have your own opinion on the matter. I’m not here to tell you what you should or shouldn’t do. Personally, we chose to use both financial and positive reinforcements for chores because we saw value in both.
The reality is you are going to do whatever you can to build on the strengths of your children and strengthen their weaknesses. Only you know which is best.
Whatever you do, help them build a good work ethic from a young age by giving them some practical and age appropriate chores to do to gain it.
Allowance For Kids
Giving your kids an allowance is important to helping them learn to manage money. If you want to teach kids the value of money, they need money to put what you’re teaching them into practice.
Myths about giving your kids an allowance:
- They will get spoiled
- This is definitely not the case. If you want to teach your kids the value of a dollar, give them the opportunity to earn or get an allotted amount of money each month.
- You can’t afford it
- Kids can learn how to budget with any amount of money. Never underestimate what a minimal amount of money will do to help your kids budget.
- They can only earn an allowance by doing chores
- This is definitely not the case. You can give your kids chores and still use positive reinforcement for the chores themselves. There’s nothing saying you can’t give your kids a set allowance every week or every month that isn’t tied to chores.
- There is actually a special value in choosing this method. You are teaching by modeling how to budget and giving them a set amount of money to learn to save with.
Teach Kids Budgeting Importance
Every child can learn how to budget. Even young children can embrace the idea of saving and budgeting.
If you were to give your child an allowance of $15 a month to buy anything extra they may want and they really want a new toy that costs $30. This is an opportunity to teach them how to save for another month to get that toy they really want.
There is also a great opportunity for practical learning moments too. They may choose to purchase a cheaper item so they can have it now.
If they do, they may find the cheaper toy was just fine and they didn’t want the more expensive one as bad as they thought they did. Great! Capitalize on this and be sure to highlight that they found equal value in the item they chose to purchase.
LIFE LESSON – Sometimes we can’t always have (or get) what we want…
If they purchase a cheaper item and then wish they had saved to buy the more expensive toy, talk to them about how they can still save for it. You can easily expose them to a cost/risk analysis method at their own level.
Do you want the toy enough that saving for two months would make you happy? Would the toy bring you joy? What would you choose to do to save the money?
LIFE LESSON – Sometimes it’s worth it to save your money for something special. You might even save money or spend less in the long run…
Teach Kids To Save Money
Teaching your kids to save money is one of the most important lessons to teach them early in life.
The widely accepted 50/30/20 rule says you would use 50% of your income for your essentials (rent, food, gas, etc.), 30% for discretionary spending (movies, eating out, entertainment) and 20% for savings. This is the ideal situation.
You may be thinking, but I can’t even do that myself!
Remember, the point here is to teach kids the value of money by learning how to have a healthy relationship with money.
If they learn the ideal way to manage money when they’re young, they will be much more likely to learn to live within their means as they grow into adulthood.
Even if you start off with teaching your younger children to save 20% of the birthday check they got or 20% of their allowance you are on the right track!
Older kids will need to learn more about how to budget in keeping with the real life situations they will find themselves in before you know it.
Teach Kids The Value Of Money
Raising kids that have a strong foundation sets them up for success later in life. Let’s be honest, it may save you a lot of money in the long run too.
No matter what stage of parenting you are in, it’s never too late to start teaching your kids how to save money, how to be financially responsible and generally manage money.
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Be sure to comment below on how you teach kids the value of money! What do you struggle with?
Let’s encourage each other through this process.
This post was all about how to teach kids the value of money through five simple tips any parent can do at home. Financial literacy, chores for kids, allowance for kids, teach kids about budgeting importance and teach kids to save money are all included.