Money Management Lessons

What Are Different Money Management Lessons For Teens?

Posted on October 11, 2023 by Tim Connolly

Money management for children is a crucial life skill that teens should begin learning early on to set a strong foundation for their financial future. Here are some key money management lessons for teens:

Budgeting: Teach teens the importance of creating a budget. Help them understand how to track their income and expenses. Encourage them to allocate a portion of their income to savings, necessities, and discretionary spending.

Saving: Emphasize the value of saving money. Encourage teens to save a portion of their allowance or earnings regularly. Setting savings goals, whether for short-term purchases or long-term objectives, can be motivating.

Delayed Gratification: Teach teens that sometimes it’s better to delay immediate wants for long-term goals. This concept can be illustrated by saving for a desired item instead of impulsive spending on something they want right now.

Emergency Funds: Explain the importance of having an emergency fund. A portion of their savings should be set aside for unexpected expenses, like medical bills or car repairs, to avoid going into debt.

Banking Basics: Educate teens about different types of bank accounts, such as savings and checking accounts. Teach them how to write checks, make deposits, and use online banking tools to monitor their accounts.

Credit and Debt: Explain the difference between credit and debit cards. Emphasize that using credit cards irresponsibly can lead to debt, and educate them about interest rates and the consequences of carrying a balance.

Financial Goals: Help teens set financial goals. Whether it’s saving for a car, college, or a vacation, having specific objectives can encourage responsible money management.

Earning Money: Encourage teens to explore part-time jobs, internships, or freelance opportunities to earn their own money. Earning their income can instill a sense of responsibility and independence.

Comparison Shopping: Teach teens the importance of comparing prices before making purchases. Show them how to research products and find deals to get the best value for their money.

Needs vs. Wants: Help teens distinguish between needs (essential expenses like food, housing, and education) and wants (non-essential items like entertainment or designer clothes). Prioritizing needs over wants is crucial for financial stability.

Investing: Introduce the concept of investing and how it can help grow wealth over time. You can start with simple explanations of stocks, bonds, and mutual funds. Consider setting up a mock investment portfolio to teach them how markets work.

Taxes: Teach teens about income taxes and how they impact their earnings. Explain the importance of filing tax returns accurately and on time.

Charitable Giving: Encourage teens to give back by donating a portion of their money or time to charitable causes. It helps instill empathy and a sense of social responsibility.

Identity Theft and Online Security: Discuss the importance of protecting personal and financial information online. Teach them about password security and how to recognize phishing attempts.

Financial Consequences: Show teens real-life examples of financial consequences, such as interest charges on credit card debt or the benefits of compound interest on savings. Learning from practical scenarios can be more effective than theoretical lessons.

Communication: Encourage open communication about money within the family. Discuss financial goals, challenges, and decisions together to promote financial literacy and responsible money management.

In conclusion, teaching teens about money management is essential for their financial well-being. These lessons can provide them with the knowledge and skills needed to make informed financial decisions and build a secure future. By instilling these principles early on, you empower teens to navigate the complex world of personal finance with confidence and responsibility.

Money Management Lessons

Money Management Lessons For Teens

Posted on September 22, 2023 by Tim Connolly

Money management is a crucial life skill that teenagers should learn early to set a strong foundation for their financial future. Here are essential money management lessons for teens:

Understand the Basics: Start with the fundamental concepts of money, including income, expenses, savings, and budgeting. Explain that money is a limited resource, and making wise choices is essential.

Create a Budget: Teach teens about money and how to create a budget. Help them list their sources of income (allowance, part-time job) and their expected expenses (e.g., clothing, entertainment, saving for college). Encourage them to allocate money to different categories.

Prioritize Needs Over Wants: Emphasize the importance of distinguishing between needs and wants. Needs are essential for survival (e.g., food, clothing, housing), while wants are desires (e.g., video games, designer clothing). Encourage responsible spending by prioritizing needs.

Saving Money: Teach the value of saving money for both short-term and long-term goals. Discuss the benefits of having an emergency fund and saving for future expenses like college, a car, or a vacation.

Bank Accounts: Introduce the concept of banking. Encourage your teen to open a savings account at a local bank or credit union. Explain how interest works and how their money can grow over time.

Smart Spending: Discuss strategies for making informed purchasing decisions. Teach your teen to compare prices, read product reviews, and avoid impulse buying. Encourage them to think before making a purchase.

Credit and Debt: Explain the basics of credit and debt. Discuss how credit cards work, the importance of paying bills on time, and the potential consequences of accumulating high-interest debt.

Set Financial Goals: Help your teen set specific, achievable financial goals. Whether it’s saving for a smartphone, a car, or college tuition, having clear goals provides motivation and direction.

Earning Money: Encourage your teen to explore ways to earn money, such as part-time jobs, babysitting, tutoring, or starting a small business. Teach them the value of hard work and earning income.

Understand Taxes: Introduce the concept of taxes and explain different types of taxes, such as income tax and sales tax. Discuss the responsibilities of taxpayers, including filing tax returns if applicable.

Avoid Financial Pitfalls: Educate your teen about common financial pitfalls, including scams, identity theft, and predatory lending practices. Help them recognize warning signs and make informed choices.

Teach Investing Basics: Introduce the concept of investing as a way to build wealth over time. Explain the power of compound interest and the different investment options available.

Use Technology Wisely: Emphasize responsible technology use, including online banking and budgeting apps. Teach your teen to protect their financial information and be cautious of online scams.

Involve Them in Family Finances: Share age-appropriate information about your family’s finances. Discuss monthly bills, budgeting, and saving for family goals. This real-world exposure helps them understand financial responsibilities.

Monitor Progress: Periodically review your teen’s budget and financial goals together. Celebrate their achievements and make adjustments as needed. Use these opportunities for financial discussions.

Learn from Mistakes: Emphasize that making financial mistakes is a part of learning. Encourage your teen to view mistakes as opportunities for growth and improvement.

Seek Guidance: Teach your teen when and how to seek financial advice or guidance from trusted adults, mentors, or financial professionals.

Lifelong Learning: Stress that financial education is an ongoing process. Encourage your teen to continue learning about personal finance throughout their lives to adapt to changing financial situations and goals.

By imparting these essential money management lessons, you equip your teen with the knowledge and skills they need to manage money responsibly, make informed financial decisions, and navigate the complexities of the modern financial world with confidence. These lessons will serve them well as they transition into adulthood and face various financial challenges and opportunities.

Money Management Lessons

6 Important Money Management Lessons For Kids

Posted on September 18, 2023 by Tim Connolly

Teaching kids about money management is a crucial life skill that will benefit them throughout their lives. Starting early helps instill good financial habits and a responsible attitude toward money. Here are six important money management lessons for kids.

1. The Value of Money

The first lesson to impart to kids is the value of money. Explain that money is earned through work and effort. Start with simple tasks like chores around the house and tie an allowance to completion. This teaches them the connection between work and money, helping them appreciate its value.

2. Saving:

Teaching kids to save is essential. Encourage them to set aside a portion of their allowance or any money they receive as gifts into a savings jar or account. Explain that saving money allows them to buy more significant items in the future and helps in emergencies. Use clear jars or piggy banks to make the saving process visible and engaging.

3. Budgeting:

Introduce the concept of budgeting to kids by creating a simple spending plan. Help them categorize their expenses, such as toys, treats, and savings. Discuss the importance of staying within their budget and how it can prevent overspending. As they get older, involve them in creating a more detailed budget.

4. Delayed Gratification:

Teaching kids to delay gratification is a valuable lesson. Explain that it’s okay to want things, but they should save and plan for them. Use examples like waiting to buy a coveted toy until they have saved enough money. This teaches patience and helps avoid impulse purchases.

5. Needs vs. Wants:

Help kids distinguish between needs and wants. Needs are essential items like food, clothing, and shelter, while wants are things they desire but can live without. Use everyday situations to illustrate this concept. Encourage them to prioritize spending on needs before wants, teaching them responsible decision-making.

6. Giving and Sharing:

Teach kids the importance of giving and sharing by involving them in charitable activities. Encourage them to donate a portion of their allowance or time to a cause they care about. This instills empathy and a sense of responsibility towards others, showing that money can be used for more than just personal gain.

Conclusion:

These six money management lessons lay a strong foundation for kids to become financially responsible adults. By teaching them the value of money, the importance of saving, budgeting skills, delayed gratification, distinguishing between needs and wants, and the joy of giving, you empower them to make informed financial decisions throughout their lives. Start early, be patient, and lead by example to help your children develop healthy financial habits that will serve them well in the future.

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Money Management For Teens

Posted on August 17, 2023 by Tim Connolly

Money management is an essential life skill that every teenager should learn. As teens begin to earn money through part-time jobs, allowances, or gifts, it’s crucial to instill good financial habits early on. Proper money management empowers teenagers to make informed decisions, plan for their future, and avoid common financial pitfalls. Here’s a guide to help parents to effectively teach teens about money:

Budgeting: Teach teens the importance of creating a budget. Help them track their income and expenses, categorizing items such as entertainment, savings, and personal expenses. Emphasize the need to spend within their means and allocate a portion of their income for savings and future goals.

Savings: Encourage teens to save a portion of their earnings regularly. Introduce them to the concept of short-term and long-term goals, such as saving for a new gadget or college tuition. A savings account or a piggy bank can be used to visually track their progress.

Setting Goals: Teach teens the value of setting financial goals. Whether it’s buying a car, traveling, or starting a small business, having specific goals helps them prioritize their spending and stay motivated to save.

Avoiding Impulse Spending: Discuss the dangers of impulse buying and encourage teens to think before making purchases. Teach them to differentiate between wants and needs, and suggest implementing a waiting period before making non-essential purchases.

Credit and Debt: Educate teens about the basics of credit and debt. Explain how credit cards work, the importance of paying off balances in full, and the potential consequences of accumulating debt. Help them understand the concept of interest rates and the impact of debt on their financial future.

Part-Time Jobs: If teens have part-time jobs, help them understand paycheck deductions, taxes, and the importance of saving a portion of their earnings. This experience provides valuable insight into the real-world financial responsibilities.

Comparison Shopping: Teach teens to shop smartly by comparing prices and seeking deals before making purchases. Introduce them to online resources and apps that can help them find the best prices for items they want.

Basic Investing: Introduce teens to the concept of investing and the power of compound interest. Explain how investing even a small amount early on can lead to significant growth over time.

Emergency Fund: Stress the importance of having an emergency fund. Explain that unexpected expenses can arise, and having a financial cushion can help avoid going into debt.

Financial Responsibility: Teach teens about the importance of paying bills on time and building a positive credit history. Discuss the consequences of late payments and how responsible financial behavior can positively impact their future.

Open Communication: Create an environment where teens feel comfortable discussing money matters with you. Answer their questions, offer guidance, and share your own experiences to help them make informed decisions.

Online Safety: Teach teens about the risks associated with online transactions and the importance of protecting their personal and financial information when making online purchases.

Charitable Giving: Encourage teens to consider setting aside a portion of their money for charitable donations. This teaches them the value of giving back to their community and those in need.

In conclusion, equipping teenagers with money management skills is a vital step towards their financial independence and future success. By teaching them to budget, save, set goals, avoid impulse spending, and make informed financial decisions, you empower them to make responsible choices and build a strong foundation for their financial future.

Money Management Lessons

5 Simple Money Management Lessons to Teach Your Kids Before They Leave for College

Posted on August 7, 2023 by Tim Connolly

Teaching kids about money management lessons before they leave for college is crucial for their financial success and independence. College is a time when many students are away from home for the first time, facing new financial challenges and responsibilities. By imparting these five simple money management lessons, parents can help prepare their children to make wise financial decisions and build a strong foundation for their future:

Budgeting Basics:

Budgeting is the cornerstone of good money management. Teach your kids how to create a budget by tracking their income (e.g., allowances, part-time job earnings) and expenses (e.g., books, transportation, entertainment). Encourage them to allocate their funds to cover essential needs first, such as housing, food, and utilities, before setting aside money for discretionary spending. Emphasize the importance of living within their means and avoiding excessive debt.

To reinforce these lessons, consider using budgeting apps or spreadsheets to help them manage their finances effectively. Regularly review their budgets together to identify areas for improvement and celebrate their successes.

Understanding Credit and Debt:

Before they leave for college, teach your kids about credit cards, loans, and the importance of building good credit. Explain how credit cards work, including interest rates and potential fees, and the consequences of accumulating high-interest debt. Encourage them to use credit responsibly and only when necessary.

Moreover, help them understand the difference between good and bad debt. Student loans, for example, can be a useful investment in education and future earning potential, but other high-interest debt, like credit card debt for non-essential purchases, should be minimized or avoided altogether.

Saving for Emergencies and Goals:

Teach your kids about the importance of saving for emergencies and future goals. Encourage them to establish an emergency fund to cover unexpected expenses, like car repairs or medical bills. Having a financial safety net can prevent them from relying on credit cards or loans during challenging times.

Additionally, discuss long-term saving goals, such as saving for post-college expenses, travel, or graduate school. Introduce them to savings accounts and discuss strategies to save consistently, like setting up automatic transfers from their checking account to a savings account.

Making Informed Financial Decisions:

Help your kids develop the skills to make informed financial decisions. Teach them how to compare prices, shop for discounts, and avoid impulsive purchases. Encourage them to research and understand financial products, such as student loans or credit cards, before committing to them.

For significant financial decisions, like choosing a bank or a credit card, involve your kids in the process and discuss the pros and cons of each option. Empower them to ask questions, seek advice, and be critical consumers.

Practicing Frugality and Resourcefulness:

Encourage your kids to adopt frugal habits and resourcefulness to make the most of their money. Teach them how to cook simple and cost-effective meals, shop at thrift stores, and use coupons or student discounts. Remind them that small savings can add up over time and contribute to better financial health.

Moreover, discuss the benefits of being resourceful with their resources. For instance, encourage them to borrow or rent textbooks instead of buying new ones, find free or low-cost entertainment options on campus, and consider carpooling or using public transportation to save on commuting expenses.

Overall, teaching these five simple money management lessons to your kids before they leave for college will equip them with essential financial skills and habits. By mastering budgeting, understanding credit and debt, saving for emergencies and goals, making informed financial decisions, and practicing frugality, they will be better prepared to navigate their financial lives independently. As parents, continue to offer guidance and support as they develop their financial independence, and remember that these valuable lessons will serve them well beyond college into their adulthood.

Money Management Lessons

5 Important Money Management Lessons for Kids

Posted on November 21, 2022 by Tim Connolly

Parents are constantly teaching their kids about money management, whether they are aware of it or not. Kids pick up on whether you plan shopping, put money into savings, or spend irresponsibly. At its most basic, teaching money management to children is about developing a good example. You should also take the time to support your kids and learn how to manage money with specific lessons.

Good financial habits take a long time to grow, so it is necessary to start teaching and practicing with your kids at an early age. Experience is always the best teacher. Believe it or not, your kids do pay attention to what you do, including how you handle your money. So, be sure to practice what you teach.

Here are money management lessons to teach your kids:

Start with currency, then teach about banks

With younger kids, physical currency is a great way to learn about money. Whether you teach them to put their money in a piggy bank or keep paper money in fixed envelopes, managing money explains the basics of money management. As kids get older, around ages 9 to 12, they can learn about savings accounts. Kids in this age group can set aside part of their budget to put into an interest-bearing bank account to get into the habit of saving money for later.

Teach kids about saving and spending with an allowance

Whether allowances are tied to chores is a unique decision for every family. A method that works well is to give kids a balanced allowance in exchange for the basics expected of them and allow them to earn more with bigger chores like trimming the lawn or managing the family laundry. Yet you deal with allowances, you should highlight that saving and sharing are just as essential as spending. Kids can set aside money for saving and for charity in separate piggy banks, while older kids can use a bank account for setting aside a part of their allowance.

Help kids understand to comparison shop

Kids in school can understand the basics of comparison shopping. Let kids see you creating a shopping list and looking at deals to note where specific items cost less. Take your kid grocery shopping with you and show how you choose brands to make your money buy more

Motivate older kids to earn extra money

Average school-age kids are not able to get a standard job, but that does not mean they do not have opportunities to earn extra money. Here are some ways kids can earn extra:

Collecting recyclables and taking them to the recycling factory
Tutoring students who are struggling with academic subjects
Managing and setting up a family garage deal
Doing housework for old neighbors
Doing yard work in the summer
Pet sitting and dog walking
Babysitting

Teach Children the importance of giving

While earning, saving and spending are necessary, so is helping out those less blessed. Explain to your kids why you give money to charity and motivate them to give some of their allowances to someone who is in need.

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The Importance of Teaching Girls Money Confidence

Posted on May 10, 2022 by Tim Connolly

If we want to change the wage gap for our girls, we must teach money confidence and also provide skills of money management to children. When girls learn about money, they learn critical life skills like salary research and negotiation, and the need to maximize their incomes throughout their lives to build wealth and financial independence.

They also learn about investing and the power of compounding and time. That information can help girls learn to start saving early in their careers to ensure sufficient funds for retirement. Finally, girls’ financial literacy means a foundation for creating a life with opportunities and choices.

The scary financial story for our girls today is that despite the Equal Pay Act of 1963, and lots of press about Hollywood and other industry wage discrimination, women working full-time continue to earn a fraction of what their male counterparts do — coming in at 80 cents on the dollar in 2017, according to the U.S. Census Bureau.

Even scarier is that our academically successfully — and frequently superior — recent female college graduates continue to under-earn their male counterparts. According to a recent study by the Economic Policy Institute, recent female college grads earned 86% of what men earned in 2015, down from 91% in 2000.

SALARY NEGOTIATIONS

So, what does that cost women in a lifetime? Studies show that a half million dollars is what under-negotiations in a first salary can cost someone by age 60. Why is this still going on despite policy changes, publicity, and overall greater awareness of the problem?

One thought is that women earn less because they do not negotiate salaries as effectively as their male counterparts, if at all. So why not? Let’s take a step back and look at what happens as girls grow up and what they learn about speaking up for themselves.

Psychologist Carol Gilligan has shown that girls learn between the ages of 11 and 15 or 16 that it is dangerous to say how she actually feels, compared to younger girls who are more courageous.

Conversations with older adolescents can be marked by the phrase “I don’t know” when a few years earlier, the girls were outspoken and confident. Another psychologist, Mary Pipher, talks in her book Reviving Ophelia: Saving the Selves of Adolescent Girls about how girls who speak frankly are labeled negatively, and that girls are trained in society to be feminine and to “achieve, but not too much.”

In my experience as a mother and a teacher, I remember my middle school daughter and her friends starting to say that it was not nice to “brag,” which really meant avoiding saying positive things about themselves. Later, in my financial education classes with high school girls, I saw the evolution of that idea.

When asked if my students would ever try to negotiate a higher salary, one girl said she would not ask for more money if it could hurt the company or other people working there. Another girl said she would never speak up for herself; she would work hard and wait to be noticed.

MONEY CONFIDENCE IS THE ANSWER

So how do we break this cycle for the next generation of women? The answer is money confidence. Money understanding is multi-faceted. There is the knowledge that needs to be acquired, there are the skills that need to be developed, and then there are actions that need to be taken. For example, it’s not just enough to know that you should be earning what you’re worth, you actually have to negotiate the salary. In simple terms:

Money Understanding = Knowledge + Skills + Disposition

Money confidence is believing in your ability to take care of yourself financially. It involves the ongoing learning and demonstration of the skills, mindset, and deeper understanding of how the critical financial pieces of your life fit together. These pieces include human capital, wealth management, and value creation.

In one recent high school girls financial education class of mine, we discussed the context of women and money, looking at issues around the gender wage gap, women and work, girls’ rising ambition levels, and the importance of income in the overall financial picture. We did a fantastic exercise about salary negotiation, so the girls could begin to understand — and experience — that critical process.

When we came back together for a debrief of the activity, the girls discussed the challenges of the process and also the exultation when they had made a strong argument for a raise and got it. We talked about what it would take for them to negotiate a higher salary in a real-life situation. In the exercise, the girls had to make a case for why they should be paid more.

During the debrief discussion, one student remarked that she could see how much confidence in herself would align with what she would be paid in the future. The answer is obvious. Without confidence in your own worth it can be difficult, or even impossible, to make a cogent argument on your own behalf, or even start the conversation for a higher salary.

THE GENDER WAGE GAP

Salary negotiations can be tricky. Part of the process is speaking up about your skills and contributions, defining that value in the workplace, and asking for more of the employer’s scarce resources for yourself.

So, if you are someone who has grown up being taught not to “brag,” chances are explaining your skills and asking for recognition of your value is not going to be something that comes easily to you.

While the gender wage gap is caused by a number of different factors, an unwillingness to negotiate is certainly one of them. Carnegie Mellon economics professor Linda Babcock suggests that men are four times as likely as women to negotiate their salary.

When we look at the evolution of adolescent girls, it is easy to see where women’s reluctance in this area might come from. Once we know where a problem comes from, the solution becomes that much clearer.

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8 Helpful Tips for Teaching Kids About Money

Posted on April 13, 2022 by Tim Connolly

For kids who see food show up in the refrigerator and gifts magically appear under the Christmas tree, it’s easy to think that money grows on trees.

Children don’t always know that everything has a price tag. But being money savvy is an incredibly important life skill, so it’s essential to start teaching money management to children – the sooner, the better.

While the basics – like identifying money and giving change – are taught in school, it’s often left up to parents to teach kids about money behavior and values – like saving, spending wisely, and giving to charity. Here are some tips for teaching kids money management and smart spending.

1. Give them some

The best way for kids to learn how to handle money and spend wisely is to give them practice! A time-tested way to do this is by giving them a weekly allowance. When should kids start getting an allowance? When they start to ask for things, suggests Karen Skinulis, parent coach at Parent Talk, so they will have some money to buy the things they ask for.

Make sure you set clear expectations before giving your child an allowance, adds Skinulis. She suggests parents sit down with kids and think about what the child needs the money for and what amount they need so they can actually buy these things. Start out with a small amount for young children, to be used for treats or small toys.

As kids get older, think about whether things like electronics, lunch, or clothes should be included, and if a portion of the allowance should be put away for saving or donated to charity.

An allowance is a great tool for both kids and parents. Instead of the child asking Mom or Dad for something, says Skinulis, “the question could then be, do you have enough money saved up to buy that? And if the child does, would you want to spend your allowance to buy it?”

This gives kids the opportunity to make their own spending decisions, and parents are able to put a limit on their kids’ spending without being nagged or having to say no.

2. Let them make mistakes

Once kids have some cash, don’t restrict them. Instead, let them make mistakes – and they probably will. “They might spend it too quickly or run out of money,” says Skinulis, “and those are great learning lessons.” They’ll think, “When I spend and it’s gone, I don’t have it for something else. And that’s really the life lessons that we want them to learn: it’s not unlimited,” says Skinulis.

So let them spend their money on candy bars at first. They’ll soon see that if they want that video game, they’re going to have to save up. This will help them learn to delay gratification by saving – an important step in getting kids to really think about their purchases.

3.Take them shopping

Doone Estey, principal at Parenting Network Inc., suggests parents start talking to kids about money in the grocery store, “where kids think you can take whatever you want off the shelves.” Get them involved by having them hold the shopping list or coupons. Teach them how to comparison-shop and find the best value. Ask them for their input on how the grocery budget should be spent.

While grocery shopping is an important activity for kids to understand, be careful when taking kids to the mall. Try to avoid encouraging kids to shop as a ‘just-for-fun’ leisure activity.

4. Model good money behaviour

Skinulis warns parents against buying their kids something every time they’re in a store. “You go into a store with the idea we need something, and just because a child sees something they like, doesn’t mean you buy it for them,” advises Skinulis. Make it clear what you’re going to a store to buy beforehand, and remind them why you’re there.

“I wouldn’t do a lot of impulse shopping in front of them,” adds Skinulis, “because I think it models the idea that I get whatever I see.” Instead, try to show your kids how you make decisions when it comes to money and buying – and this means thinking and researching your purchases before you make them.

5. Help them make a wish list

Once your child has some money, their eyes might be bigger than their piggy bank. Sit down with your child and making a wish list. Then rank the items, encouraging them to research how much each item costs, where they can get it, and how long it will take them to save up for it. This is a great way to help kids learn to make priorities and get them into the habit of planning before they buy something.

Having trouble getting kids to think before they buy without nagging them? Check out Gifting Sense, a free online/mobile survey that asks kids questions to help them learn what to consider before making a purchase – like price including taxes and shipping, and how often the purchase will be used.

6. Ask them to chip in

“Sometimes parents are way too quick to buy things for their kids and not ask the kids to help pay for it out of their allowance,” says Estey. When kids haven’t helped pay for something, they might not appreciate it. And this could lead to a cycle where kids constantly ask for new things that they don’t necessarily take care of.

If an older kid with a clothing allowance needs a new pair of sneakers, Estey gives as an example, a parent might say, “’I’m willing to buy you the $75 sneakers, but I’m not willing to buy you the $100 sneakers, so you need to fill in the difference if you really want these cool [brand-name] sneakers.” This type of exercise teaches kids about the difference between needs and wants, and helps them think about how they want to spend their money.

7. Bring them to the bank

To a child who just sees you taking money out from the ATM, it may seem like the bank just gives out money, says Estey. In order to teach a child about how the banks works, take them to one and open up a bank account for them – most banks have children’s accounts with no fees and no minimum balance. This is an excellent opportunity to talk to them about saving and interest.

Next time they get a cheque for their birthday from Grandma, have them deposit it in their account, says Skinulis. This teaches them how to keep their money safe, not to spend it as soon as they get it, and how to make it grow.

8. Talk about it

One of the most important things to remember when teaching your kids about money is to talk about it – frequently and casually. Let kids know that finances are important but also accessible and not scary.

Money Management Lessons

6 Important Money Management Lessons for Kids

Posted on February 2, 2022 by Tim Connolly

Parents are constantly teaching kids about money management, whether they’re aware of it or not. Kids pick up on whether you plan your shopping, put money into savings, or spend irresponsibly. At its most fundamental, teaching money management to children is about setting a good example. You should also take the time to help your children learn how to manage money with specific lessons. Here are 6 good money management lessons to teach your kids:

1. Start With Physical Currency, Then Teach About Banks

With younger children, physical currency is a great, tangible way to learn about money. Whether you teach them to put their coins in a piggy bank or keep paper money in designated envelopes, handling money demonstrates the basics of money management.

As kids get older, around ages 9 to 12, they are capable of learning about savings accounts and why they’re important. Kids in this age group can set aside part of their allowance to put into an interest-bearing bank account to get into the habit of saving money for later. High school students can learn to use representational currency, like debit cards, for money management.

2. Teach Kids About Saving, Sharing, and Spending with Allowance

Whether allowances are tied to chores is an individual decision for each family. One method that works well is to give kids a flat allowance in exchange for the basics expected of them (like making their beds and feeding household pets), and giving them the opportunity to earn more with bigger chores (like mowing the lawn or handling the family laundry). However you deal with allowances, you should emphasize that saving and sharing are just as important as spending. Kids can set aside money for saving and for charity in separate piggy banks or envelopes if they’re young, while older kids can use a bank account for setting aside portion of their allowance.

3. Help Kids Learn to Comparison Shop

Children in elementary school can understand the basics of comparison shopping. Let kids see you making a shopping list and looking at sales circulars in order to note where certain items cost less. Take your child grocery shopping with you and show how you compare brands to make your money buy more. When your child wants to buy something with her allowance or money she’s been saving, show her how to comparison shop with online sales circulars and by checking store websites for prices, so she can get the most for her money.

4. Encourage Older Kids to Earn Extra Money

Middle school-age kids may not be eligible to get a traditional job, but that doesn’t mean they don’t have opportunities to earn extra money. Here are some ways kids can earn a little extra:

•Collecting recyclables and taking them to the recycling plant
•Organizing and setting up a family garage sale
•Doing yard work in summer, and snow shoveling in winter for neighbors
•Babysitting
•Doing housework for elderly or infirm neighbors
•Tutoring students who are struggling with academic subjects
•Pet sitting and dog walking

5. Teach Children the Importance of Giving

While earning, saving, and spending are important, so is helping out those less fortunate. Explain to your kids why you give money to charity and encourage them to give some of their allowance or other earnings to the less fortunate. Learn about what your child feels strongly about and show him ways to help. If he loves animals, for instance, help him raise money for a local animal shelter. If he’s especially fond of his grandparents or great grandparents, find out if he can help with your local Meals on Wheels program. Children should understand that giving of their time is an important way to help others when they don’t have a lot of money to donate.

6. Teach Kids About Credit in an Age-Appropriate Way

While your kindergarten student isn’t ready to learn about credit cards and loans, you can still teach her the basics of “credit” with games like “the marshmallow test” that show the value of delayed gratification. When your middle schooler wants to buy something that’s relatively expensive, tell her she can save up, or borrow the money from you – with interest and a loan due date. If she fails to pay you back on time, show her the consequences by adding a penalty cost. Check out Intuit’s latest app, Turbo, with your teen to help them understand the importance of handling credit responsibly.

Sound money management is one of the most valuable life skills you can teach your children, and starting when they’re young is best. Demonstrating good money management yourself is extremely important, because kids are so good at absorbing what’s going on around them. Tailor your money management lessons to their age and maturity level, and you lay a solid foundation for good money management skills once they’re grown and out of the nest.

Money Management Lessons

5 Money Management Lessons to Teach Your Kids

Posted on January 28, 2022 by Tim Connolly

Most parents are quick to teach their kids about staying safe and being polite, but valuable life lessons about money can seem more daunting. However, parents are a child’s biggest influencers when it comes to money — after all, you’re their only role model when it comes to spending and saving your hard-earned cash — so it’s important to teach your offspring how to handle finances. What should you teach your kids to help them grow into financially mature and independent young people? Here are five important lessons for money management for children need to hear from their parents.

Lesson 1: Frame Wants Versus Needs

Young children and even many teenagers tend to undervalue the difference between wants and needs when it comes to spending money. It is important for parents to demonstrate that there is a difference between absolute necessities like housing, bills, and food, and items that may seem important but are non-essential like new mobile phones or clothes. Teach them that it’s vital to keep money aside for required payments before they start spending on non-necessities.

Lesson 2: Put Costs Into Perspective

Your kids probably think that they’d be rolling in it if they earned an adult wage. In reality, they are probably underestimating how much money is absorbed by taxes, a mortgage, childcare, and other important payments. When your child asks for an expensive games console or toy, put the price into perspective by discussing how much people in different jobs earn and where their money might go before they pay for that item. It might be helpful to frame it in terms of how many hours that child would have to work to earn the money if they were earning a typical wage. It’s always a good idea to start helping kids learn about their spending habits and choices by empowering them to earn the money for items they want by doing chores or extra tasks to help.

Lesson 3: Encourage Good Saving Goals

Teaching your child how to save their money is one of the most helpful things you can do for their development. Encourage them to save a portion of pocket or birthday money towards something they have asked for like a new gadget. You could even offer to give them a little interest if they manage to save up for a certain period of time. This lesson will last long into the future and play a huge role in your offspring reaching financial independence as an adult.

Lesson 4: Search For The Best Deals

Show your kids that prices can vary hugely across the same products — not all houses, computers, and shoes are priced equally, but sometimes it can be worth paying more for a better quality product. This lesson is one that many adults take for granted but it can lead your child in the right financial direction from an early age. It can be as simple as showing them that two off-brand toys cost the same amount as one branded product, and asking them to think about the best combination of quantity and quality.

Lesson 5: Credit Card Debt Is Serious Business

As your kids hit their teen years and start thinking about jobs, moving out, and independence, it’s vital that you teach them about credit cards and how to avoid credit card yet. Stress the fact that credit cards should only be used with caution and a plan to pay off what is charged monthly. Also, you should stress that credit cards certainly aren’t for discretionary spending. Remind them that credit card debt can affect their credit history and make it difficult for them to buy a house or a car or even get a job in the future.

Like it or not, money is a central part of all our lives, so teaching your kids to be financially responsible before they start earning money will pay off down the line.