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

Money Management for Kids: 12 Tips That Make It Easy

Posted on February 2, 2022 by Tim Connolly

All parents want their kids to grow up to be responsible adults. And being able to manage their finances (and eventually leave the nest!) is part of the big picture. Children grow up seeing their parents handle money, write checks, use an ATM machine and purchase things with credit cards. Starting at a young age, teaching kids money management will help them in their understanding of financial matters.

When paying children an allowance, avoid tying it to specific chores. Instead, tell your child the purpose of their allowance is to teach them in managing money.

Encourage everyone in the household to pitch in with chores without compensation expected.

Avoid using money as a reward or punishment. Teach your child that money is a tool to help them in life.

Let kids make mistakes and learn from them. This might include a purchase they later regret.

If you pay your child an allowance or monthly salary, increase it as he/she gets older. At the same time, increase the number of things they’re responsible for purchasing.

Let your child manage their spending money without your interference.

Encourage your child to save. Consider a matching program for long-term savings such as college or a car.

Encourage your child to give of their time, money and talent to a charity, church, synagogue, local shelter, etc.

Model needs versus wants by letting your child see you saying “no” to something you desire.

Encourage your child to delay instant gratification by comparing prices on something before purchasing it.

Once a child reaches his/her early teens, help them open a checking account. Oversee the writing of 3-4 checks each month as well as teaching your child how to balance their monthly statement.

While teaching money management for kids, be sure to talk about credit cards, how they work and the proper use of them. Discuss marketing techniques that will come their way, offering to-good-to-be-true no interest offers.

Money management for kids doesn’t have to be complicated. Just follow these easy steps and your children will be well on their way to obtaining healthy life-long money management skills.

money lessons

Teaching Kids About Money

Posted on January 31, 2022 by Tim Connolly

Many adults who learn about proper money management learn the hard way. A common thread in personal financial recovery stories is a journey to “rock-bottom.” Often, a financial crisis is necessary to motivate people to change behavior, learn to be responsible for their finances, and set them on a path towards improvement. This type of trigger seems to be built into human psychology.

Many recovering drug addicts, for example, didn’t admit they had a problem until their life was so unlivable that they had no choice. The stakes when dealing with financial problems are usually not as high, but the concept is similar, and is repeated all the time.

But for kids now, it doesn’t have to be like that. If you are a parent, you can be both a model and a teacher on how to manage money and here, we’ll dive into techniques to do just that. The problem is that studies show we’re failing to teach our kids about money. Get a load of these statistics:

A T. Rowe Price survey showed that half of parents are reluctant to talk about money with their kids.

That translates to 8% of parents who never talk about money with their kids, while 28% talked to them about money one time a month or less (this is actually an improvement from a few years ago).

In an earlier study, only 15% of parents surveyed actually set aside specific time to talk to their kids about money.

Another study showed that most parents consider some money topics off limits, like family finances, parental income, investments, and debt.

One of the unintended consequences of not talking about money is that parents end up supporting their children well into adulthood.

Surprisingly, Merrill Lynch found that children get more expensive–not less–with time: 79% of parents provide their young adult children with financial support. Parents spend twice as much on their adult children than they do on elective retirement savings.

That’s not good for retirement, nor is it setting your children up for long-term financial success.

We could do better. And we need to do better. Teaching kids about money should be right up there with teaching them to cook, clean, and do their laundry before they graduate high school! Managing money well is an essential life skill. We aren’t born knowing how to fund an emergency account or how to think about our retirement goals. Kids need to be taught (or learn the hard way) everything from simple savings to complex investing. And if it’s not taught? Those kids might end up depending on you for longer than you’d like.

money lessons

5 Ways to Teach Your Kids How to Save Money

Posted on January 31, 2022 by Tim Connolly

Teaching kids about money and how to do so is a life lesson that will shape their financial future and lead them to financial independence. When saving becomes part of their routine at an early age, it’s a habit that will continue through all stages of life. So, consider the following tips when teaching your child about saving:

1. Teach by example

Children learn by mimicking the actions of others, so it’s important to set positive examples of financial responsibility. To teach them the basics, demonstrate how you earn, spend, save, and give. Show them real life examples of the benefits of saving money, whether it’s putting money in your emergency fund for when something goes wrong, saving up for a fun family vacation, or simply taking a trip to the ice cream shop.

2. Cash is a teaching tool

Limit your handouts, and instead let your child earn cash by completing chores or helping out around the house. Encourage them to count the money and separate it into clear jars for saving, spending, and giving. Cash is tangible, and the concept of seeing physical money grow will resonate with them.

3. Open a savings account

When your child is old enough, take them to the bank with cash they’ve earned and help them open their first account. Teach them how to read the statement and show them how the balance grows each time they make a deposit. The sense of pride and responsibility that comes with having their own account will be another incentive to keep saving.

4. Set goals and save up

Have your child make a list of items or experiences they want to save for and be sure to include the price and timeline. Review the list together and decide what the first savings goal should be. Choose an inexpensive item with a short-term “save by” date. This will not only teach your child how to save but also show them how to prioritize financial planning. Have your child deposit money into their savings account each time they earn money or receive it as a gift. Once your child has saved up enough money to meet their goal, take them to the store with their cash to purchase the item themselves.

5. Saving can be fun

Praise your child and use positive language to verbally encourage them. Bring them to the bank with you and make it an exciting outing for you to do together. Let your child decorate their money jars or piggy banks to really make them their own. These things will encourage them to take ownership of their money and decisions, helping them continue saving and making smart financial choices.

money lessons

3 Money Lessons Every Parent Should Teach Their Kids

Posted on January 31, 2022 by Tim Connolly

One of the most important jobs of a parent or caregiver is to help children establish healthy habits that will prepare them for lifelong success. From catchy songs and rhymes that teach a toddler how to brush and floss their teeth correctly to reminding your teen for the thousandth time to wear their seat belt, parents play a monumental role in getting kids ready for whatever life throws at them. But are we, as parents, including essential lessons about money into the mix?

Here are 3 money lessons that every parent should teach their kids…

Lesson # 1

How to Work Within a Budget

Financial education for kids is something that many people struggle with, particularly young adults. However, teaching this money lesson to your children helps them to build an understanding of the concept, along with the confidence to do it successfully. It also allows them the opportunity to fail, if necessary, in an environment that is safe and carries little consequence in the long term. So what does a lesson in budgeting look like?

Here is an idea to help you get started:

Give your child an allowance, and then help them divide it into a budget. Many people like to allocate a percentage for saving, a percentage for spending on a need and then a percentage for spending on a want. Be sure to assist kids with making these calculations and then become their accountability partner.

Lesson # 2

How to Understand the Time Value of Money

If I asked you whether you would rather have a penny doubled every day for 30 days or a million dollars, many people would quickly pick the million dollar option. However, a little math would reveal that if you chose the doubled penny, you would net over 10 million by the end of the 30 day time frame. This fun exercise helps to demonstrate the importance of the time value of money.

For a very practical way to put this into practice with kids, consider this idea:

Open up an interest drawing savings account for your kids. Provide them with a seed deposit, or let them invest their own money. Each time they receive an interest payment from the bank, track it and discuss how the money is growing. Encourage them to add more and see it grow too.

Lesson # 3

How to Save for Something Big

Begin by explaining that many times we want to purchase something that we don’t have enough money to buy right now. In order to be able to buy it, we have to set back money in increments until we reach our goal amount. Depending on the age and interests of a child, walking out this lesson could take a few weeks or possibly years.

Here is a great way to apply this lesson:

Discuss a savings goal with your child to purchase something “big” they want to buy. Begin tracking the progress to the goal, discussing challenges and setbacks that occur along the way.

financial literacy

Financial Literacy and The Importance of Teaching Children and Young Adults About Money

Posted on January 31, 2022 by Tim Connolly

Due to the pandemic, many of us are facing the reality that our children are not going to be headed back to school in the Fall and instead will most likely continue with virtual learning. There are many creative and engaging ways to teach life lessons outside of the classroom, even if you are not a certified teacher! One area that is important to talk about with children at any age is finances.

The sad truth is that most children are growing up without any financial education whatsoever, whether at home or at school. Since 2016, not one U.S. state has added personal finance to the K-12 standards.

This lack of financial basics is creating long-term negative effects. For example, nearly one fourth of millennials are spending more money than they earn and 67% of Gen Yers have less than 3 months’ worth of savings in emergency funds. Studies show that children benefit from learning how money works, beginning at a very young age. These are just a few of the benefits that come from financial literacy:

A better understanding of the United States and the world economy
Young adults who open a savings account as a child tend to have more assets as adults
Kids who spend and handle money on their own (with their parents’ supervision) tend to be more self-confident about money once they are on their own and less anxious about their finances
Greater chance your child will save for retirement
Shown to have a reduced amount of personal debt as an adult and a lower likelihood of using high-cost methods of borrowing

While many parents understand that there is the value of teaching kids about money, they often are not sure where or how to start. These are three ways to think about teaching your children about money:

Demonstrate and demystify the relationship between work and money: You can do this by including kids in family budget discussions. Meal times are a great time to talk to kids about money. If you are planning a family vacation, for example, have them research how much items cost. They can look up airline flights, car rental rates, hotel options, local activities, etc.

Open a savings account with your child: A perfect opportunity to teach children about budgeting and saving is when they receive money from special events or birthdays. Consider taking your child with you to the bank to open the account or having them help make online deposits. You can have them split the received money into thirds: a third can be used on themselves, a third given to a charity, and a third put into a bank account.

Also consider letting your child invest their money in the stock market. You can let them pick the stock the money is invested in. I remember investing in McDonald’s when I was in third grade! I was so excited as my mom explained that I would have a VERY small ownership in the company. Then, each quarter, she would show me my account statement and I could see how the value would go up and down. These examples are powerful ways you can show children the power of compounding as well as build their confidence in saving for the future.

Play games involving money: Money-themed board games like Monopoly or Life are engaging, memorable introductions into understanding how money works. Play store or restaurant and include your children when you make trips to the bank or ATM machine.

As women business owners, teaching financial literacy to our own families, especially to our daughters, is very important. Studies consistently find that women have lower financial literacy levels than men, even after accounting for marital status, education and income. This gender gap in financial literacy is observed throughout women’s lives. However, as parents we can stop this trend.

Parents are likely to pass down good and bad financial habits to their kids. Parents who discuss financial topics with their kids at least once a week are significantly more likely to have kids who say they are smart about money (64% vs. 41%).

financial literacy

6 Ways to Teach Financial Literacy to Kids

Posted on January 29, 2022 by Tim Connolly

Here are some great ways for teaching kids about money.

1. PLAY GAMES THAT INVOLVE MONEY

One of the best ways to teach a lesson is by doing so without your child even realizing that they are learning. Play games that include a financial element like Monopoly or Life and help them strategize during the game. This will help your child learn the importance of budgeting and planning for the future, all under the guise of play.

2. MAKE A WISH LIST WITH YOUR CHILD

An essential part of financial literacy is creating a set of priorities. We can’t have everything we want all at once, but we can achieve our goals over time if we plan ahead. This is a great lesson that children can learn. Sit down with your child and have them list five things they want. Then have them rank them from most important to least important. Once the list is created, strategize with your child about how they can obtain their wishes.

3. TEACH WHILE YOU SHOP

Take your child shopping and actively explain your decision-making process. When you arrive at the store, tell your child how much money you have to spend and what your priorities are. Show them why you are picking one item over another and explain things like discounts and coupons.

Remember, children will learn from your example. Telling them about budgeting is important, but it’s much more impactful if they see you following a budget yourself. Additionally, give your child small amounts of money to spend themselves. You’ll be surprised at how happy they will be to spend $2 on anything they want! They’ll also learn the importance of spending with a limited budget.

4. GIVE AN ALLOWANCE

Giving an allowance gives children first-hand experience with money. They learn the rewards of careful spending and saving and the risks of making impulsive spending decisions. And those risks are a lot smaller than they will be later in life! Kids also appreciate things that they can buy with their own money. If you’re wondering how much allowance to give, know there aren’t strict guidelines. Some parents choose to give one dollar for each year of a child’s age.

Other parents base their kids’ allowance on work they do around the house — like cleaning, lawn and garden chores, or babysitting younger siblings. Some parents put their kids in charge of paying for some of their own expenses — like clothing, video games, or tickets to movies — and set the allowance based on that. Whatever amount you decide on, keep in mind that it will become a regular expense for you to consider in your family budget. Make it work for you and your child.

5. SPLIT MONEY INTO CATEGORIES

Get a piggy bank that splits money into spending, saving, and giving. Teach your child about what each category is and how they are allowed to use the money in each section. Every time you give them their allowance, talk them through how they plan to use their funds. Place the piggy bank next to your child’s wish list so that their spending and saving goals are clear to them. Also, talk through the charitable causes your child thinks are important, and when they hit a giving goal, donate the money to that cause in your child’s name.

6. INVOLVE YOUR KIDS IN MAJOR PURCHASES

Deciding where to go on vacation? Buying a new appliance? Include your kids in the process and have them help with the research. You can show them the factors that go into making the decision and have them help you compare the options before making the purchase.

They’ll feel proud to know they helped with the research to make the best decision for the entire family. In short, teaching children about finances can be easier than it might seem. It just takes a bit of planning, a little patience, and some creativity.

Once your child learns the basics of finances, you can increase their financial responsibilities by upping their allowance and helping them to open a savings and checking account. These lessons will help your child develop a healthy attitude towards money as they grow into adults.

Kids and Money, money lessons

9 Tips You Can Use To Teach Your Kids About Money

Posted on January 29, 2022 by Tim Connolly

Teaching kids about money is one of the most important lessons parents can impart. And it’s never too early to start. Many experts agree that children as young as three can start building fundamental financial lessons. And by the age of seven, they can form lifelong money habits, according to a study conducted by the University of Cambridge.

But children develop at different rates, so it’s up to you to decide when your little one is ready. To help you get started, we rounded up nine tips you can use to teach your kids about money — whether they’re threenagers or on their way to adulthood.

9 tips you can use to teach your kids about money

Introduce bartering or play pretend store — Ages 3 to 4

Even before your tot enters kindergarten, you can familiarize them with the concept of bartering: exchanging goods or services for something of comparable value.

Try this with toys at first, then consider getting a grocery store playset that lets you and your little one roleplay as a cashier and customer. These playsets typically include a shopping basket, plastic produce and a child-sized cash register you can use to teach how financial transactions work.

As your kid gets a bit older, they may even hone their bartering skills with friends by trading baseball cards, Pokémon cards or other children’s collectibles.

As an added bonus, this can also sharpen their social skills. (I’ve never been more popular than when I snagged Ken Griffey Jr.’s rookie card back in third grade!)

Teach them about bills and coins — Ages 3 to 7

Once your little one is old enough to understand numbers and their value — and to know not to put money in their mouth! — it’s time to teach them about cold hard cash.

“Children should be taught to recognize currency and specific denominations as soon as they’re able to understand basic counting,” says Mark Daoust, CEO of the business marketplace Quiet Light.

“If you teach a child what a quarter is and that there are four of them in a dollar, by the time they start school, they’ll have a basic knowledge not only of money but of addition, subtraction, multiplication and division.”

On your next trip to Target, give your child $1 and tell them they can pick out a toy to buy. This is the perfect opportunity to drive home the true value of money — and why they can’t afford that Batmobile Lego set they claim they can’t live without.

Start using savings jars — Ages 3 to 7

After your kid finally understands the value of money, get them in the habit of saving any cash they earn, get as an allowance or receive as gifts.

Opt for three separate savings jars or piggy banks for:

Spending
Savings
Giving

This will let your child watch their money grow and teach them to keep their savings and spending money separate.

Although some financial experts recommend kids put more money in their spending jar than their savings jar, we suggest maintaining more in the savings jar or a balance between the two to underscore the importance of saving for the future.

Ashley Patrick from The Money Mindset Podcast agrees. “I recommend kids 3 to 5 years old put 10% in the give jar, 45% in the save jar and 45% in the spend jar. As they get older, you can adjust percentages based on your child,” Patrick tells Finder.

Once your kid has grasped the concept of glass jars, you can open a kids’ savings account to teach them about interest. (My dad did this for me, and I’m forever grateful!)

Debit cards for kids — Ages 5 and up

Once you’re sure your kid has a firm grasp on the fundamentals of money management, consider signing them up for a kids’ debit card. These cards generally fall into one of two categories:

Prepaid debit cards for kids
Debit cards linked to a checking account for kids

Many kid-centric prepaid cards include monthly fees and mobile apps that let parents assign chores and pay allowances, whereas kids’ checking accounts are free but have less parental oversight. Some kids’ checking accounts also include financial literacy features, but you’ll be more likely to find interactive quizzes with prepaid debit cards.

If you want a kids’ debit card that offers the best of both worlds, look at Chase First Banking. It offers $0 monthly fees, store-specific spending controls, hands-on financial learning and allows parents to set up recurring allowances and assign chores (a dream come true!). But you’ll first need to have a Chase checking account to be eligible to open one for your kid.

Involve them in the purchasing process — Ages 5 to 8

One of the most effective ways to boost your kid’s financial literacy is to involve them in the purchasing process. Take your kid to the grocery store and give them a budget to buy a snack. Encourage them to compare products based on price, rather than brand names or the artwork on boxes.

Another way to teach them is by vocalizing your own spending decisions. For example, if you’re buying a bag of salad, you may opt for one brand over another because it’s on sale or has a BOGO discount. Explaining this aloud can help your kid understand the rationale behind your purchasing decisions.

Gift-buying and budgeting — Ages 5 and up

If you pay your kid to do chores or give them a weekly allowance, the holidays are a PERFECT time to teach them about budgeting. Buying gifts on a budget requires your kid to think critically about how much they can spend on each person on their list. Help them calculate the total amount they want to put toward all gifts and how much they can afford to spend on each person.

Money-saving expert Andrea Woroch recommends speaking to your kids about budgeting on an ongoing basis. “Involve your children in household budgeting talks, especially when it comes to things or experiences that involve them, such as saving for college, taking a vacation or back-to-school shopping.”

Financial literacy workshop — Ages 5 to 17

Many banks and credit unions host free financial literacy workshops for kids in grade school and high school. These programs often include instructions, worksheets and other resources to help children wrap their young minds around basic banking concepts such as fees, loans and interest.

If your local bank or school doesn’t offer these programs, interactive online workshops can help your kid learn to be more mindful about their money.

Games — Ages 5 to 13

Popular board games like Monopoly Jr. and Payday involve play money and require careful financial planning to be the winner.

“The Game of Life is great for first and second graders,” says Todd Christensen, an accredited financial counselor and the author of Everyday Money for Everyday People. “However, I recommend the ‘Extreme Reality’ edition of Life since other versions promote gambling and ridiculous income opportunities.”

In addition to classic board games, many modern video games include a financial dimension as well. For example, the wildly popular Nintendo Switch game Animal Crossing incorporates a savings account and a mortgage account that accrues interest when players don’t pay back their loan. Playing this game can teach your kid how interest works and the consequences of late payments.

Virtual bank accounts — Ages 5 to 14

Another way to kickstart your kid’s financial literacy is to have them play around with a virtual bank account. Apps like Bankaroo simulate the banking experience and teach kids how to manage money without using actual dollars. In some cases, kids can also input their existing balances to make the exercise even more real.

However, these apps require your kid to know how to read, so you might want to hold off on introducing them until they’ve graduated from kindergarten.

Money and Finances

3 Tactics To Teach Teens How To Manage Money

Posted on January 29, 2022 by Tim Connolly

If you missed a few opportunities to teach your kids about money in the past, you can make up for the lost time by trying these tactics for teaching teens about money.

Talk about finances and expenses. “Simply talk to your teens about finances and expenses,” says Kalicia Bateman, personal finance editor at Best Company. “They may not understand all the ins and outs of mortgage or credit card payments, but it’s important that they’re made aware of these types of expenses. Consider including them in family budgeting discussions that might traditionally be kept between parents. Allow them to see how you manage money and budget for large expenses, such as a vacation.”

Open up a bank account. If your child is old enough, consider opening up a checking account like Chase First Banking. “Explain to them how a debit card works in connection to their checking account and teach them how to write a check, even though they’re rarely used these days. Have them monitor their account through the mobile app,” says Claudia Gonzalez, a financial adviser from Kovar Wealth Management. “This way they’re aware of how much money they have available to spend. It teaches them the basics of budgeting.”

Add them to your credit card. Consider adding your teen as an authorized user on a credit card once they get a job. This way they start learning the responsibility of paying off their balance on time and in full. “If they prove to be responsible with its use, older teens may eventually get a low-limit credit card backed by their parents. Urge them to pay the balance off in full each month, and if it isn’t, consider terminating the card or placing it on a freeze until responsible credit behavior is established,” says John Longo, professor of finance at Rutgers University and the author of Buffett’s Tips: A Guide to Financial Literacy and Life.

Effective Money Management Lessons

6 Effective Ways To Teach Young Kids About Money.

Posted on January 29, 2022 by Tim Connolly

Money lessons for kids that will last a lifetime.

Teaching your kids about money can be fun — you can take a day-to-day activity and make it a learning moment, or turn a complex topic into a game. Your child has something to learn money-wise at every point in their life, from toddler to high schooler.

Teaching your child about financial responsibility is a gradual process that will build on itself from age one to 18. It’s an ongoing discussion that starts in very early childhood and continues into high school. Making sure your child has a firm understanding of finance and money growing up can help them secure a stable financial future in adulthood.

Here are some easy and fun ways to teach your kids about money.

Explain where the money comes from.

When you’re teaching your kids about money, it’s important to teach them where it comes from. Money does not just come from mom and dad’s wallets.

The key is to demonstrate and demystify the relationship between work and money, “When you work, you get paid. When you don’t, you don’t get paid.”

Preach the three principles: giving, saving, and spending.

Once you’ve established that money comes from work, teach your kids the three basic principles when it comes to money — giving, saving, and spending.

Giving is one of the most important of the three categories because you’re teaching them to feel the impact of helping others at a young age.

As for saving and spending, encourage your child to set aside some of their money for savings and some to spend each time they get paid. Remind them that once their money is gone, it’s gone. And yes, your kids will make mistakes, but they should make those mistakes under the safety of your roof.

Play games that focus on money and spending.

Young children learn primarily through play. Classic games, like Monopoly or Life, teach your child more than just board game etiquette. They also teach youngsters important life skills, like purchasing real estate or saving up for retirement.

Give them Allowance, but it shouldn’t be just for fun stuff

Allowances should be issued with the understanding that some of this money can be spent on fun stuff, but some of it also has to go towards covering needs.

When deciding how much allowance to give, you’ll want to be sure that everyone understands what the allowance must cover. Is it school lunches? Snacks? Computer games? Sports activities? Field trip? Or buying their friend a gift? Always write it down initially so there are no misunderstandings later.

If your child is meeting their saving goals, consider throwing in a bit more cash the next week.

Kid blew all their money and needs more? Seize this teachable moment

Many parents can relate to this scenario: your kid had money, but they spent it all at the toy store. Now, you’re at the toy store again and they want something but they don’t have the money. What do you do?

Teach them that when the money runs out, it runs out. It will be tough at the moment, but in the long run, you are teaching them to live below their means — and that’s the only way to win with money.

Work on your relationship with money

Young children are constantly observing — and absorbing — our behavior. If you’re spending above your means or stressing about money, your kids are likely picking up on this and learning that this is what money is: a thing of scarcity or scares, or whatever you project onto it.

If they see you spending above your means, they’ll think that’s normal for everyone. You have the opportunity as their parent to lead by example and set them up to win with their money.

Money management for children doesn’t have to be complicated! So many adults are afraid to think about their money, which is why it’s so important to demystify earning, spending, and saving from an early age. By steadily increasing your child’s responsibility level with money, you’ll help them prepare for bigger money management challenges as they mature!