Teaching children about money doesn't have to be hard. However, like discipline, it has to be planned, consistent and tracked. Start early, and talk often and regularly about finances; encourage, set goals and guide. Several magazines about basic money handling are worth a one-year subscription if you need help, and both government and private websites will help pave your path to success.
Step 1
Teach children about money as soon as they are able to count. Consider using money, both change and dollar bills, to teach them counting and numbers.
Step 2
As they grow, talk to them about the value of money and your values about money. Make sure they learn the difference between needs and wants. For example, compare food to a toy.
Step 3
Teach savings and charity. If they get an allowance, have them save a certain amount of it before they spend anything. They can start saving in a piggy bank. Use a simple bank savings account as they get older so they can see the money grow with interest. Set aside an amount to give to a selected charity.
Step 4
Set goals. Don't let them save for the sake of saving. Help them set a goal that they can reach with the money they are saving. Talk about where money comes from and the difference between saving and spending. This is the time to bring up delayed gratification.
Step 5
Teach them how to shop. Have them take some of their allowance or some of the money they have saved and head out to the stores. Show them how to compare prices and look for sales. Teach value.
Step 6
Let them make the decisions. They won't learn about the things they really want and the things they thought they wanted without making a mistake or two along the way.
Step 7
Teach the value and the beast of interest. Show them how to invest, perhaps with a no-load mutual fund that allows small investments. Explain to them the cost of debt and the snare that interest can become.
Things You'll Need
- Pennies, nickles, dimes and quarters
- Dollar bills of several denominations
- Any favorite food and any child's toy
- A piggy bank
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