Tim Connolly

Financial Advice, financial education, financial literacy

Budgeting for Teens: Teaching Teens to Save

Posted on April 21, 2022 by Tim Connolly

Financial habits are established early in life, so it’s never too soon to start teaching teens the importance of budgeting and saving money. Here are five practical lessons for responsible money management.

1. Develop a Savings Habit

Teenagers should pay themselves first by putting a certain percentage of the money they earn into a separate savings account. Getting used to setting aside 10% will prepare them to create an emergency fund, save for their first home and set money aside for a rainy day.

You can also instill the value of philanthropy by encouraging your teen to give to an organization of their choice. If your teen’s employer offers direct deposit, show them how to set up an automatic transfer of funds from every paycheck into a separate savings account.

If your teen needs an extra incentive, you could offer to add 1% or 2% to the total amount they save over a set period of time.

You might also consider helping your teen set up an automatic savings app. There are a number of reliable savings apps available for free or a very low price. By linking their account, your teen can make savings goals and set triggers for an automatic deposit, at which point the app could move money from their checking account to their savings account, for instance.

Or, the app might round up transactions to the nearest dollar and sweep the difference into a savings account.

2. Use Online Learning Resources

There are a wide variety of online tools that can help you teach your teens how to manage their money. For example, the Consumer Financial Protection Bureau manages the Money as You Grow site to help prepare children “to live financially smart lives.”

It offers activities and resources that make it easier to talk to kids and teens about spending wisely and saving money as they get older.

3. Differentiate Between Needs, Wants and Wishes

The ability to distinguish between needs and wants will help your teen become a smart spender. Today’s teens live in a world of immediate gratification, so parents should explain financial goal-setting, which includes wishes, wants and needs in both the short term and the long term.

Having conversations about needs and wants with teens not only helps them differentiate between the two but also teaches them to evaluate and make better financial decisions — such as opting for a more affordable used sedan over a shiny new sports car.

4. Keep a Record of Spending and Saving

You can use a simple system to help your teen track spending: Mark 12 envelopes to correspond with each month of the year. Then ask your teen to save each month’s receipts in the appropriate envelope. This will allow them to review purchases, evaluate past buying decisions, and recognize when they could have spent more wisely.

This exercise will help your teen improve spending habits over time. Perhaps they will think twice about spending money to eat out for the third time in a week and put that money into savings instead.

5. Establish a Financial Plan Together

When it’s time for your teen to decide how to spend money, have them set specific financial goals. Whether they want a bike, a first car, or to prepare for college expenses, setting a clear goal will give your teen a better understanding of how much they need to save on a regular basis.

Then you can work together to set a weekly or monthly saving goal that will help your teen reach that goal as well as help you in offering financial education to kids.

Teach Kids About Money, Teach Teens, teaching kids about money

Do your teens understand money? Here are 6 tips to start the conversation

Posted on April 21, 2022 by Tim Connolly

The tween and early teen years can be a tricky time for kids.

Not only are they encountering new social situations and gaining more responsibility, they are also forming a big part of their relationship with money.

“Kids this age are old enough to really understand how money works,” said Chantel Bonneau, a wealth management advisor at Northwestern Mutual.

“They are starting to understand the consumer world,” she added. “It’s a really great opportunity to make money relatable.”

It’s also a time when kids are starting to have true peer-to-peer relationships and begin measuring themselves against others, said Ali Hutchinson, managing director at Brown Brothers Harriman and leader of the firm’s next-generation program.

“Having conversations at home, early and often, about things like income disparity, wealth disparity, the value of money —including online currency — is going to equip the kids to have a better chance at success,” she said.

It’s also important to teach them autonomy and how to delay gratification during these years.

With that in mind, here are 6 money lessons you can use with kids ages 10 to 14, because being a parent it’s your responsibility to teach kids about money.

1. Set goals

The next time your child asks you to buy something that is out of the norm — such as Justin Beiber concert tickets or a video game — ask your kid to come up with a plan to save up for it.

Work up the cost and build a plan on how you can save for it — and whether it is even within the range of your saving ability, Bonneau said.

In fact, even adults aren’t always connecting financial decisions to goals.

That’s where they get lost, she said.

“The clearer you are on the goals, it makes it so much easier to make the right decisions.”

2. Teach them how to earn money

Help your child come up with ways to earn money so that they can start saving toward their goal.

If you have the ability, pay your kid an allowance or pay for doing certain chores around the house.

You can also help your child come up with other ideas to make money, like babysitting or dog walking.

3. Understand needs vs. wants

Now that your children have their own spending money, they’ll have to learn the difference between something they need and something they want.

They’ll also have to gain the ability to delay a purchase.

You want to teach them how to make a good and best choice … with the amount of resources they have.

Have them conduct research of the item they want to buy — which will also teach them to spend wisely. Show them online reviews and help them differentiate between paid advertising, influencers and unbiased reviews.

4. Let your children fail

Even if they did their due diligence, your children may still make the wrong spending choice.

Let them, Hutchinson said.

“Research has found that maybe it makes sense to let them ‘fail’ a little bit now,” she explained.

“Maybe they will remember that feeling when it comes to potentially a bigger failure later on.”

5. Set a shopping budget

When you take your kids shopping for something like clothes, give them a budget to work with. Have them add up the purchase total, including a tax, before they bring it to the register, Bonneau said.

So, if you give your child a $100 budget and he or she comes back with $120 worth of clothing, they’ll have to decide what to keep and what to put back.

“You want to teach them how to make a good and best choice … with the amount of resources they have,” she said.

This way, “they don’t become an adult that just puts everything on a credit card because they didn’t know how to work within the context of a budget.”

6. Talk about money

Conversations around money used to feel taboo. Yet experts believe they are vital, especially for children.

You can start by asking your kids questions, such as how would you describe our family’s values, and how would you respond to a friend who wants you to pay for something you don’t want to pay for, Hutchinson advised.

“When comes to 10- to 14-year-olds, it’s really hard to know exactly what they know, so asking questions and listening to their responses is really important in this age range,” she said.

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5 Financial Tips for Teens

Posted on April 21, 2022 by Tim Connolly

While 93% of American teens say they know how the economy works, 29% have had no economic schooling, according to a survey of 1,000 U.S. teens ages 13-18 by Wakefield Research on behalf of Junior Achievement and the Charles Koch Foundation.

Even in light of their false confidence, teens are aware of the importance of financial education, being a parent it’s your responsibility also to teach money management to children.

Although the study identified numerous gaps in economic and financial knowledge, it also showed teens do know where to look for credible information. Two-thirds (67%) recognize they should use their school as a resource.

Beyond the classroom, another 63% of students believe they should use their parents as resources for economics education. Help influence the financial literacy of a teen in your life with these practical money-management tips adapted from the curriculum.

Set goals. Managing your money is more meaningful when you’re doing it with purpose. This might mean budgeting to ensure you have enough money to maintain your auto insurance and keep gas in your car, or you may be saving for a big senior trip. Knowing what you want to achieve with your money can help you plan how you spend it more wisely.

Weigh needs vs. wants. When you begin making your own money, it’s easier to indulge your own wishes and spend money on things you don’t necessarily need. To some extent, that’s not a bad thing; rewarding yourself is fine when you do so within reason. That means not exceeding your available funds, and not forsaking things you truly need, like gas money to get to and from a job or school.

Get a debit card. Most people find that having cash on hand makes it easier to spend. If you use a debit card instead, you’re an extra step away from spending so you have a little more time to consider your purchase. Another benefit of a debit card is it helps track your purchases in real-time so you can keep constant tabs on your balance and ensure you don’t overdraft your account.

Start a savings habit. Even if your income doesn’t allow for much, it’s a good idea to get in the habit of setting aside a portion of each check. It may only be $10, but over time each $10 deposit can build your account toward a long-range goal.

Protect your privacy. Teens who’ve grown up in the digital age tend to be less skeptical and cautious about privacy matters than their elder counterparts. It’s important that young people understand the potential impact of failing to protect their privacy when it comes to financial matters, including the possibility that their identities could be stolen and all of their money siphoned away. Teaching kids about security is an essential lesson in economics.

Teach Kids About Money, teaching kids about money

3 Things Parents need to discuss with Children Today

Posted on April 21, 2022 by Tim Connolly

In today’s fast-changing World it is very tough for every Parent to raise Kids properly so they can achieve & live a healthy & prosperous life. To raise Kids properly every parent has to make Kids Foundation very strong.

It very tough & required many skills & techniques for parents to raise their kids properly & keep away her/him from unnecessary digital gadgets, to learn them time management, money management & to develop other qualities which lead kids to become them a Good & Successful Human Being.

Here I’ve cover three main topics which are very crucial & need to discuss at an early age so Kids can understand better & can make good decisions in their life.

Let’s have a look at these 3 most vital topics:

1. Failure, Disappointment & Depression:

In this World no one is perfect & everyone faces some failure & disappointment in their life at different stages. Same is for children they also face failures & get disappointed.

The main difference is that adults can handle failure but some time Kids cannot handle failure & get disappointed. It may cause depression in children. There are lots of reasons for depression in Kids.

It’s parent’s duty to watch their Kids & analyze if they are in any problem if yes then give kids a proper solution, help & guidance so Kids can learn to manage & handle these situations effectively without harming themselves.

Reasons for Disappointment & Depression and Children issues:

There are lots of reasons like Kids not performing well in Exams, not able to perform better in sports, may be a victim of bullying, may be a victim of cyberbullying or may have some appearance issue.

Solution for Disappointment & Depression in Kids:

To solve & help kids first parents have to have a watch on their Kids if parents found some changes in Kids behaviour, manners, lack in the study, health or anything irregular then they should talk to their kids as a friend & should support their kids morally & emotionally.

Parents should not behave like a saviour, always they should teach their kids how to manage all these problems & if all these things are discussed with kids at an early age then these learning will definitely help Kids in handling all these types of situation beautifully. Know more Children Issues & Solutions in detail.

2. Sex & Other related Topics:

It may seem an irrelevant topic to discuss with Kids but it is very important to tell & teach Kids about Sex & other related topics. Not at a very early age but parents should start to discuss early so Kids can understand things about sex & related topics.

Parents can start talking with kids when watching the pregnant woman on TV or some other program-related with child education. Parents also can start talking while explaining private parts & good touch & bad touch. All these good teaching will help kids in better understanding about sex.

If a child better understands all these things then a child can understand good touch & bad touch, can analyze bad situations & can save them. It also helps kids to not follow bad habits & can save them creating the wrong perception about sex.

3. Financial Planning/Money Management:

To teach Money Management or Financial Planning to kids, it’s not an easy task for parents. Parents have to start it early to teach children about money so in future, they can handle & can do better financial planning.

In starting parents should take kids while going for market & should use Cash so that they can understand how money is used for purchasing goods.

Parents should give some tasks of shopping to kids in limited budget with shopping options like if they purchase one thing for a higher amount then they can go for other options also to save money. These types of tasks will help kids in understanding how money is used & how they can save money.

Parents should teach children how money is managed & should tell them different terms & there meanings like: Spending, Saving, Investment, Donation. All these terms help kids to understand better money management. There are lots of other methods which parents can try to teach kids about money.

Hope this will help every parent to connect and communicate with their children more easily and will make their bonding more strong and will help children in understanding and managing these problems easily.

Financial Advice, financial education

Fun Ways to Teach Your Child About Money

Posted on April 21, 2022 by Tim Connolly

From an early age, children can learn about money and value. While it may seem like a difficult topic to help a young child understand, there are some fun ways in which you can offer financial education to kids.

Play games involving imaginary money

Letting your child play games with imaginary money is a risk-free way to help them understand the concepts around it. Even children as young as toddlers can play games like “store” or “restaurant” in a simple way.

For example, you can ask how much an ice cream cone costs, and hand over the appropriate amount of play money. For a toddler who may not yet be able to count out an amount of money, they can still get familiar with the concepts involved.

Investigate kid-friendly educational money games online

Websites such as Practical Money Skills offer age-appropriate games to help children learn about the concepts around money, spending, and value. These games are offered for children ages 3 to 8. Sit with your child while they play, and have discussions together about the concepts and images they see.

Put your child in charge

Older children who have a foundational grasp on numbers and addition can have fun being “in charge” of how much you’re spending at the grocery store. Give them a calculator and tell them the cost of each item you’re putting in the cart.

You may also want to ask your child to help you choose between two similarly-priced items, or change your mind and ask your child to subtract the amount. They’ll not only practice their math skills and develop a sense of pride, but they’ll learn more about the value of everyday items.

Financial Advice, financial education, Financial freedom

How Your Child Spends His Allowance

Posted on April 21, 2022 by Tim Connolly

Whether or not you put strings on receiving the allowance, once it’s him, you really can’t make your child use it as you want. That’s just not fair (not that everything has to be fair, of course). After all, you want your child to think for himself when it comes to money. According to a survey on teens and money consulted by USA Weekend, 75 percent of kids had complete control over their money.

You may want to place some expectations on how your child spends it, but you really can’t require your child to use the allowance as you see fit. You can, however, focus on how to teach kids about money by discussing these issues with your child.

Dictating Your Child’s Spending

In receiving an allowance, your child faces a great temptation to spend it all at the first opportunity. But one of the reasons for giving an allowance is to make sure that your child has money for the things she wants when she wants them. To do this, she’ll have to think ahead.

Piggybank on It

Some clothes are necessary (such as a winter coat, underwear, and a pair of shoes). Having 15 sweaters, however, may be desired but certainly not necessary. Consider suggesting that your child pay for the extras in this category from his allowance.

You can help your child decide how to allocate her money. Of course, the allocation will vary greatly with a child’s age, the amount of allowance, and other factors. Here are some categories that are commonly considered:

Car. Obviously, this is only a concern when your child is of driving age. He may be responsible for putting gas in your car when he uses it, or he may be able to save up and pay for the purchase and upkeep of his own car.

Charity. When you give to charity, you set an example for your child to follow. Certainly, children learn about giving to charity through the UNICEF Halloween collection program, the Girl Scout cookie drive, and in religious schools. You can suggest she set aside part of her allowance for charity and help her decide how to make her contributions.

Clothing. As kids (especially girls) get older, they tend to spend more money on clothes.

Entertainment. The extent to which your child uses his allowance for fun is up to him. In the past, teenage boys used to get bigger allowances than their female counterparts because boys were expected to pay for dates. Today, teenagers don’t have the same dating mores that their parents had. For the most part, they don’t have dates in the conventional sense—they may go out in groups or do other activities together. Generally, girls and boys share the cost of entertainment.

Savings and investments. It’s important that children start at an early age to view saving money as a regular activity. The best way to do this is to suggest that they set aside part of their allowance for this purpose. If you insist that they’re responsible for paying for certain things such as going to the movies, then they’ll be forced to save or go without.

School expenses (extracurricular activities and other expenses). While school may be public, many trips and other activities at school are certainly not free. You may want your child to be responsible for these things. Again, you may decide to share expenses (for example, she pays the activity fees but you buy the equipment).

Toys and video games. As with entertainment, kids should be allowed to use their allowance on fun things, as long as allocations have been made for savings and other categories that are necessary.

How Much Parental Guidance?

Providing guidance on what your child should do with his allowance is certainly a wise thing on your part. But how much influence should you exert? Can you insist that a certain percentage of the allowance go toward savings? Can you require your child to pay for all her entertainment costs?

There are no hard-and-fast rules; decisions here are guided in part by the age of your child, the size of the allowance, your personal beliefs, and other factors. Clearly, whatever you think the allocation should be, getting your child to follow suit requires a little finesse on your part.

Watch Your Step

If your child is supposed to pay for his own toys and entertainment, it’s not a good idea for you to pay for them whenever he’s short of funds. This won’t help in teaching responsibility for managing money. He’ll just have to forgo a movie it he doesn’t have the money for the ticket.

At one extreme, you can say nothing and let your child make all his own decisions. On the other extreme, you can set requirements on how the allowance should be allocated among the different categories of expenditures.

Somewhere in the middle is where you’ll probably want to fall, providing guidance without making the child feel like there’s no point to receiving the allowance in the first place.

Of course, it goes without saying that your child should know without a doubt that the allowance would stop in a second if it were to be used for drugs, alcohol, or other illegal activities.

Financial Advice, financial education, financial lessons, financial literacy

3 Money Skills to Teach Your Teen

Posted on April 21, 2022 by Tim Connolly

Set your older child up for success with these important lessons.

Though a child’s teenage years are often wrought with turbulence, they’re also a turning point. After all, teenagers are at an age when they’re finally able to take on certain responsibilities, such as caring for themselves without an adult present or getting a job and earning money rather than depending on their folks for an allowance.

Now, as most parents will tell you, getting a teenager to listen and take you seriously is easier said than done. As such, you may need to pick your battles when attempting to impart wisdom to an older child. But if you’re going to make the effort, it really pays to offer financial education to kids, and you can do so by focusing on these key money skills.

1. Budgeting

Budgeting is one of the most effective financial tools out there, and it’s really simple to do. If you teach your teens to budget money carefully, they will be less likely to land in debt as young adults — and suffer the repercussions involved.

Granted, it’s not that easy to teach teenagers to budget when they only have a handful of expenses to bear, such as a cell phone (assuming you don’t pay for it) or leisure spending.

But what you can do is let your teen in on your budget — the one that covers everything from your mortgage payment to your auto loan to the food you put on the table. That way, your children will get a sense of what budgeting is truly like so that when they move out or go off to college, it’ll come naturally.

2. Saving

If saving money were an easy thing to do, more people would do it. But saving money takes discipline, and that’s something a teenager may not have at first.

That’s where you come in. Review the importance of having healthy savings account with your children and explain how it could come in handy at various points in life.

Whether it’s the spring break trip your teens will want to take or the home they’ll eventually want to buy, understanding that savings make these things possible means your child is more likely to take the idea seriously.

But don’t just talk up the importance of saving money — show your teen how to make it happen. Discuss the art of setting priorities, and explain how the process of automating savings can help your child stay on target.

3. Investing

You’re no doubt aware that investing money is a good way to grow a smaller sum into a larger one. And it’s important that you share that with your teens so that they can start putting their money to work.

If your teens earn money from a job, encourage them to open IRAs, which is generally an option as long as your teen is 18. If your children are younger, you’ll need to open custodial IRAs on their behalf.

From there, you can walk your teens through their investment choices in that account and explain the various benefits, drawbacks, and risks associated with each one. Stocks, for example, can be volatile, but they offer higher returns. Bonds are safer, but offer lower returns, generally speaking.

teaching kids about money, teaching teens

TEACH YOUR TEENAGER TO WORK WISELY WITH MONEY

Posted on April 21, 2022 by Tim Connolly

Children and teenagers have to be shown and taught how to deal with money. We are advised that ‘The love of money is the root of all evil’. The source of this wisdom is the Book of Timothy in the Bible.

This well-known adage is often misquoted as, ‘Money is the root of all evil’, which does not mean the same at all. It is greed and corruption and the misuse of money which can cause trouble for us, not the cold, hard cash or credit cards in your wallet

According to your family’s wishes and beliefs, it is a good idea for children to learn to manage small amounts of money and experience having to budget for items they want. We know that we are living in a world where many young people feel entitled to have everything they want or at least everything their friends have.

Not every family has the same financial means and children should be taught to understand that fact. Teach kids about money and not to show off with it.

Decide on a reasonable allowance

Decide as a parent, with your teenager, what would be a reasonable weekly allowance. Receiving a weekly amount, to begin with may be better than a monthly sum, which may seem large and be squandered initially.

Just like all adults, all children are different, so watch without interfering, how your teenager manages money in the early stages. The amount to give depends on the parent and also on what you expect your teen to buy with this allowance.

Do you give your teen a separate budget for cellphone use, or to buy family gifts? Those details need to be negotiated between you and your teenager. Teenagers are usually still at school and either living at home or in the boarding house at school. They should not have to pay for their daily lunches at the tuck shop at school from their allowance.

To avoid this expensive trap, pack an interesting and healthy lunchbox and provide a water bottle for school every day. If the teenager wants to buy something at the tuckshop sometimes, then that item should come from their allowance.

Doing chores to earn an allowance

Many parents believe that teenagers should do chores around the home in exchange for an allowance. These chores could include cleaning the house, taking care of the garden or swimming pool, or feeding the family’s pets. A lot of teens also do the cooking at home if a parent is busy at work, or with younger siblings.

Some parents are stricter than others and will deduct from an allowance for tasks not performed satisfactorily. Doing work in exchange for an allowance can teach responsibility and give your teen a taste of what the real world will be like. Everyone needs to learn to perform basic tasks like ironing a shirt or polishing school shoes.

Teaching your teenager to budget

It is reasonable to expect a teenager to budget for non-school clothing and entertainment, such as movies or treats with friends. If they want to buy more expensive items of clothing, they should learn to save their allowance and budget. This is good training for when they are adults and working and earning their own money for the first time.

Teach your teenager to work wisely with money and save a small amount every month. Allow them to learn the value of money while still in the safety of home. Encourage them not to be extravagant or to waste money unnecessarily. Enjoy and use your money carefully, but don’t LOVE it

teaching kids about money, Teaching Teens About Money

4 Fun Ways to Teach Your Kids About Money

Posted on April 13, 2022 by Tim Connolly

Have you ever wished that someone taught you more about money as a child? The sad reality is that many students graduate from college with a degree but are unable to manage their money. Here are some tips to teach financial education to kids so they can better handle their finances in the future:

1. Talk isn’t cheap when it comes to money.

Dianne Caliman, creative director of The Centsables, an award-winning animated TV series on the Fox Business network, believes talking is key when it comes to money matters with children. She suggests including your children in the family’s money management activities such as looking through circulars and clipping coupons.

She points out that these types of activities are great jumping off points for discussions. Caliman explains that showing real life examples to children fosters understanding and meaningful connections to money management. “Show the kids your bills, and explain how purchases made earlier must be paid for now,” she says.

Caliman also reminds parents to be role models and to ask themselves the following: What messages do you send your children? Are you living beyond your means? Do you pull out the plastic for every purchase? Do you and your spouse worry or argue about money?

She advises taking a look at your own money habits, and make any changes where you think necessary. “When you exercise good financial judgment, you are automatically teaching your children by example. That’s a win-win situation for all,” she adds.

2. Make a budget-based allowance.

Make a list of the typical things you would expect your kids to buy for themselves over a period of time, plus how much you would expect them to save and give, and calculate an allowance amount to match those clear expectations,” he says.

Dwight adds that as your kids mature, you can extend the budget to cover more areas of spending like clothing. This approach helps insure that an allowance is a personal finance teaching tool rather than an entitlement.

3. Practice paying back loans before college.

One way to get practice at paying back a loan is to lend your kids money. Dwight suggests teaching your kids how to manage loan payments by arranging a parent-financed loan for a big ticket item like a laptop or a smartphone.

“Direct a portion of their allowance, chore or job payments to paying off the loan each period. By making regular payments over an extended period of time, not only will your kids appreciate the cost of expensive items more, but they’ll take better care of them.”

4. Take on the tough lessons, too.

No one said teaching kids about money was easy. It may take work to get kids on board with the idea. Rod Griffin, director of public education for Experian knows this firsthand by getting a little pushback from his own granddaughter when it came to the topic.

In her elementary school class, she has to “pay” for her school books and “rent” the desk she sits in with pretend money she earns through various activities, academic performance and good behavior. What she saves after expenses can be used to “buy” rewards.

Griffin also suggests showing high school and college-aged kids an actual credit report. A sample one is provided on the Experian website to understand the different parts and what they mean.

They can see how their financial decisions impact how prospective creditors view their credit history. They get to see how their financial behavior, such as paying bills on time or being late, is tracked and recorded much like a permanent record.

At some point, everyone has to manage their own finances. The more exposure and practice a child gets, the better equipped they will be in the future when they have to make financial decisions on their own.

Consider teaching them age-appropriate lessons as they grow to help them develop the skills they need to successfully handle their money.

money management, Money Management Lessons, Teaching Teens About Money

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.