Tim Connolly

8 Helpful Tips for Teaching Kids About Money

Posted on January 27, 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 kids about being responsible with money early on – the sooner, the better.

While the basics – like identifying money and giving change – are taught in school, it’s often left up to parents for teaching kids about money behaviour 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.

Estey suggests being as honest as possible when kids have questions about money. You don’t have to go into complete family finances, but you might want to talk about bills, investments, credit cards, or even your retirement fund. If they’re old enough, you could even discuss current events relating to the economy around the dinner table.

Money and Finances

Tips for Teaching Kids About Money and Finances

Posted on January 25, 2022 by Tim Connolly

Money is one thing that permeates every area of our lives. Without it, it is next to impossible to live, and even at an early age it is important to understand the value of money, how the manage it, and how to control it before it controls you.

Here are some important things you can do starting right now to teaching kids about money:-

Do not avoid money.

Take an active role when it comes to learning about money, ask questions, and watch what goes on around you. Observation and repetition are great ways for you to learn so talk with your parents about being involved in the family finances and ask them to help you set up your own budget plan.

Look to adults for good money practices.

Look to parents and family members for tips on how to save, how to make your money grow, and how to be a wise spender. You can learn a lot by the choices the adults in your life make both good and bad. Follow them when they do good and learn from their mistakes so you do not make the same ones.

Learn the differences between needs, wants, and wishes.

This is one of the most important things you can learn when it comes to money that will help you later in life when it comes to making good money choices. Ask them these questions: Do you need that new doll or do you just want it? Do you need that expensive dress or would a cheaper one be just as good? Do you need to get that new makeup kit now or can it wait another week or two? Distinguishing needs from wants will go a long way in helping them avoid financial troubles as they get older.

Focus on saving over spending.

It is never too early to begin saving money. You likely already have a piggy bank or something similar you put coins in or that you save your allowance in. This is wonderful and you need to continue doing so for the rest of your life. Nine times out of ten it is better to save that $5 rather than spend it if you are able to do so. You never know when a true need may arise and it is always good to have that money saved for times like that, so focus on saving rather than spending every chance that you get.

Practice making a budget and sticking to it.

If you are already saving money in a piggy bank, old mayonnaise jar, or someplace else you are off to a good start. But you can take it one step further. Get several empty jars and label them- ‘savings’ ‘wants’ ‘needs’ ‘fun’ and then divvy your allowance and money between them.

Savings is to be set aside and not touched unless something big happens like a family vacation or someone’s birthday. The wants jar is for those little things that catch your eye- new dress, new toys, and things like that. The jar labeled needs are for the things you need from time to time like new shoes or school supplies.

The final jar is for the fun items and the things you may need extra cash for- trip to the beach, money for a trip to the arcade, and other things you want to do. Learn to budget your money so you control where it goes and how you spend it.

Keep good spending and saving records.

Write down everything you spend your money on. It is amazing to see just how much money you spend on things like soda and candy, toys you never play with, clothes you wear once then forget, and things like that. You will also be able to see how much money you save month to month. Much can be learned by recording where you spend your money and how much gets spent and where you spend it.

There are many benefits to learning how to control money before you become a slave to it. Far too many adults fail to learn these important finance lessons and pay for it the rest of their lives. But you can learn to make money your ally rather than your enemy and you can make it something that works for you, rather than you always working for it. Start with these great money tips and continue at it for the rest of your life!

financial literacy

Financial Literacy for Kids: Teaching Your Kids About Money

Posted on January 25, 2022 by Tim Connolly

Parents can introduce financial education for kids early with pretend play, letting them see how you handle money, giving them an allowance, and much more. By introducing kids to financial literacy basics, you can help your child establish strong money habits.

1. Involve Them in Your Interactions With Money

A great way to introduce your child to money is by allowing them to be a part of your interactions with money. From day-to-day spending and monthly bill payments to making large purchases or paying off a credit card, there’s a lot of opportunities for them to see how you spend and save.

Talk to them about purchases you’re making.
Share your thought process with them when making decisions about large purchases.
Tell them about how you pay bills each month.
Let them contribute to family expenses.

Children learn a lot by watching what you do. Being open and honest with them about your financial habits can help familiarize them with money and spark a larger conversation.

2. Give Your Child an Allowance

Giving your child an allowance lets them have hands-on experience with money. At the same time, they’ll also gain a sense of accomplishment and financial responsibility.

Establish a set of loose rules, like how much they’ll earn, what they have to do to earn their allowance, and when you plan to give it to them. This sets clear expectations and can motivate your child.

Then, your child can earn and spend their own money. Give them opportunities to choose what they want to spend their money on, and talk them through what they should consider.

Earning an allowance can help kids see how putting effort and work in can result in a result or reward. This can be a priceless opportunity as they gain more independence.

3. Play Money Games

Hearing the word “finances” can be boring or daunting for some children. However, money management for kids can be a fun learning experience.

Depending on their age, there are a variety of board games and activities that involve money. Monopoly Junior, The Game of Life, and Pay Day are just a couple of examples that bring kids and money concepts together. Young children might enjoy a toy cash register with fake money and coins. Practice making purchases, giving change, and using different bills and coins.

Bring playtime and real-life finances together by making connections between the games and activities you do and what happens in real life. This can help your child connect the money lessons they learned from a game to real-life money habits.

4. Encourage First-Time Jobs

As your child gets older, encourage them to pursue a part-time job outside of the home. This could be babysitting, dog walking, yard work for neighbors, or lifeguarding – just to name a few. It doesn’t have to be a long-term job, but something for after school, during breaks, or over the summer as they get older.

Working toward hard-earned money can help your child understand the value of pursuing a career while giving them the opportunity to show they can be financially responsible.

5. Create Wish Lists

Get your child thinking about what they want to save up for with wish lists. Sit down and create a list that could include new toys, special trips, a new pet, or other items that require money. Help them make sure everything on their list is attainable and prioritize what’s most important to them.

A wish list gives your child something to refer back to when they’re working toward a certain financial goal (just like you do!). They can also feel rewarded by checking things off and experiencing the value of money.

6. Break Out the Piggy Bank

A piggy bank can be a great way for your child to set aside money they are saving. They might even like a separate jar labeled with a big wish list item. This lets them budget toward a certain goal and visually see their money adding up.

Another idea is to separate money into 3 different categories:

Saving: money they set aside to grow their savings
Spending: money they’re comfortable spending now
Giving: money they want to donate to a cause that’s important to them

Pinpoint what excites your child to figure out what works best for them.

7. Be Transparent About Affordability

Every family has a different way of living. Be honest with your child about what your family can afford and what you can’t. Discuss what might be worth saving up for and what isn’t a good investment.

It can be tricky for kids to understand why they have more or less than their peers. Honesty can help build a strong financial education for children to understand what it means to live within your means. It can also help them understand budgeting and be mindful of where their money is going.

In line with affordability, you can also talk to your child about debt. Explain what it means to have credit cards and loans. Share with them that debt is common, but too much debt can be difficult to manage and have a negative long-term impact.

8. Open Their First Bank Account

When you think your child is ready, talk to them about opening their own bank account. Older children may be able to open their own account, while younger children may need to open an account with a parent as an account holder as well.

Teach them about the difference between checking and savings accounts and help them get started with tracking their spending and savings. Think about other topics, too, like writing a check, checking your balance, using a debit card, and keeping your account secure.

9. Listen to Them

Take the time to listen to your children. They’ll likely have many questions along the way, and paying special attention to them can help them become financially literate. If you don’t have all the answers, that’s okay too. Research them together and help foster a positive relationship with personal finances. Who knows, maybe you’ll learn something along the way too.

teaching kids about money

The Complete Guide to Teaching Kids About Money

Posted on January 25, 2022 by Tim Connolly

When it comes to the most important life lessons money management for children ranks pretty high up there. Shopping for groceries. Paying taxes. Buying a house. Almost every aspect of your kid’s adult life will revolve around healthy money habits.

But many Americans don’t have a solid grasp on how to use their money responsibly. Nearly half of Americans don’t have enough cash to cover a $400 emergency, and a third have saved nothing for retirement. Meanwhile, more than 60 percent of young adults under 34 say that thinking about their personal finances makes them anxious.

In many cases, these young adults feel anxious about their finances because they never learned about money growing up. Fewer than 20 states require high school students to take personal finance classes, even as studies show that young Americans want to learn about money and wish they had learned to be more financially savvy in school.

That’s where you come in. Giving your kids real-world lessons at home on how to manage their finances will go a long way toward helping them stockpile plenty of savings, stay out of debt and maintain healthy credit scores.

Start With Yourself: Be a Good Example

Smoking. Drugs. Bullying. All of these are topics that parents say they would rather discuss with their kids than the family’s finances.

Maybe you have struggled with using money responsibly in the past. Maybe you don’t want to tell your kids how much you make or reveal that you’re in debt. But it’s important that you become comfortable with talking to your kids about money so that they become comfortable using it.

Brush Up on Basic Financial Concepts

Pop quiz! If you take out a loan for $1,000 with a 20 percent interest rate, how much will you owe per year in interest?

The answer is $200. Did you know that? If not, you’re like almost two-thirds of Americans who have trouble calculating interest rates.

Take some time to brush up on basic financial concepts. Make sure you understand these topics inside and out so that you can answer your kids’ questions and provide the most well-rounded lessons possible.

Get Out of Debt

Every good lesson in using money responsibly starts with reducing or eliminating debt. More than 40 percent of American households have credit card debt, and the average debt among those households is more than $5,000.

Since you will be teaching your kids about avoiding debt, you should set a good example and make sure you have paid down your debt first. Kids are more likely to practice healthy borrowing if they see their parents also doing so.

Set Family Financial Goals

In some families, one spouse takes the lead when it comes to handling the finances. Maybe your partner handles the bills, the family’s bank accounts, and the tax records, while you manage other aspects of the household.

If this is the case for your family, it’s still important for you and your spouse to sit down, go through the family’s finances and get on the same page. This way, you can better understand your family’s financial goals and communicate them with your kids.

It’s also helpful to write down your family’s financial goals and display them in a prominent place in the home. For example, if your family wants to go on vacation later in the year, you could post that goal on the refrigerator to remind everyone why the family is saving.

Protect Your Kids

Another important component of putting your kids on the best financial track possible is thinking about what would happen if you could no longer take care of them.

Even though most Americans have life insurance, a good chunk do not have enough coverage. About half of Americans have $100,000 or less in coverage. It’s recommended that you have coverage equal to at least 10 times your salary. With kids, that multiplier should typically be even higher.

Also, make sure you have a will to ensure that your assets are properly divided and that your kids are cared for should something happen to you.

financial education, Financial freedom, Kids, money management

Teaching children money management

Posted on August 26, 2021August 27, 2021 by Tim Connolly

Saving money is important. That’s a given for most parents, if not all. We have heard multiple wise sayings that convey the point of how it is of crucial importance to plan ahead and to ensure there are sufficient funds to cover any future expenses. This is especially true once couples enter into parenthood because not only do they have to feed two mouths, but now with the family’s expansion, the cost of living is only going to increase.

Parents would save money for their children’s future, which includes their daily expenses and future education this can only be possible when parents set up plans and strategies regarding money management for children.

This results in poor financial management of the next generation. Many of our children only realize the necessity of wise money management in their young adult years, and by then many have already developed unhealthy spending habits or lacked the necessary financial management skills only to remain puzzled and overwhelmed by the immense financial burdens.

So, parents must act now in being better educators, and not just fulfill the responsibility of being providers of the family. As the proverb goes “Give a man a fish and he will eat for a day. Teach a man how to fish and you feed him for a lifetime”.

With the Chinese New Year Celebration having just passed, many Chinese children would have received their ‘ang paos’ (red packets) enveloped with money from relatives as a gift of blessing to the young. There is no better opportunity than now to inculcate the value of saving money and managing it well now.

Do you know that almost 28% of Americans have zero savings set aside to cover emergency expenses. Saving money is a habit since young that needs time to build, and unfortunately even some adults have yet to master it. Yet, many parents are not assisting their child to become financially literate.

All lessons should start before the age of seven, not excluding saving money of course. The earlier you start your child’s financial education process, the better prepared your child is. You may start by explaining important concepts such as setting a budget, saving, and goals. Also, you may model good examples as their little eyes are watching you. Children learn not just from the instructions they are given, but also from imitating their parents.

It is important to let your children know that you are always open for conversations about money as this will encourage them to ask questions about saving money. Find out what they are saving for, this way, you can be assured that you are comfortable with what they intend to buy. From doing so, you may make use of the conversation to teach them simple math calculations and guide them through whether they can find it cheaper somewhere else and be a wise consumer.

financial education, Financial freedom, Kids, money management

How to give financial education for teens

Posted on August 26, 2021August 27, 2021 by Tim Connolly

Money is an indispensable resource and we have to be wary of how we utilize it. It takes us a long time to get the hang of the concept of money management. But, what if we teach our children from a very young age so that they won’t have to face the same challenges as we did?

Children are fast learners, and they observe everything very keenly. We have to teach in a way that they will remember these lessons for their entire lifetime. Here is how we can teach our children money management so that it has a long-term impact on them.

Give them pocket money

You can give your children a fixed amount every month for them to spend on whatever they want. It will also give them the independence to purchase what they want. They will also learn a very important lesson, ‘with great power comes great responsibility.’ Sure, they will sometimes recklessly spend their pocket money, but after one-two incidents, they are going to get the knack of it.

Let them handle some expenses

How long will you do your children’s work? At some point, you have to start letting them do it on their own. So why not start as early as possible? You can let your children handle some money-related matters appropriate for their age.

Things like shopping for their clothes, buying stationery, and so on can be done by kids as soon as they start growing up. If they want something from the market, then let them go on their own and purchase it. It is going to increase their self-esteem and also give them some practical experience with money.

Let them be accountable for themselves

Children are bound to bungle it up once in a while. And that is alright. We just need to teach them to be accountable for themselves. If by any chance, they lose some money, they need to hold themselves accountable for it.

Your job is to not panic, stay calm, and let your children do their job. If they mishandle some money, then don’t stress out. Instead, help them overcome the situation. It will be more helpful to them, rather than getting angry at them for their blunders.

Let them handle money-related chores at home

There are many chores in the house that require a trip to the market. You can sublet that work to your children. You can give them tasks like picking up groceries, buying stationery for the house, buying miscellaneous items, etc. your children will get a hands-on experience of the real world.

When we want to make our children independent, more often than none, things like surviving in the day to day world are missed out while focusing on the bigger things. We focus on making our child’s careers and making them successful.

Let them explore different options and then discuss

There is so much involved in how to teach kids about money as it involves understanding and implementing theoretical and practical knowledge for same. You can teach them how to manage money, different ways to invest, different ways to save, etc. This way they can learn it in detail.

Teaching Teens about money when they’re young lays the foundation for responsible money management later in life. Children whose parents emphasize the importance of financial literacy and encourage them to spend and save thoughtfully develop a healthy perspective on money.

financial education, Financial freedom, Kids, money management

Teenage money management tips

Posted on August 26, 2021 by Tim Connolly

Teach Them How To Save

A great way to teach them how to budget is once they’re earning their own money, to give them several ‘buckets’ to split their earnings into. They can put some into expenses, some into personal spending, some into savings.

Give Them An Allowance

We’ve always given our children a small but consistent allowance.

They can choose to spend it or save it. In the beginning, they would spend it on silly toys and tuck-shop. Our eldest son wanted to get a tablet, so we said that if he saved up half of the money for it, then we would pay the other half.

Open A Bank Account For Them

Our son has his own bank account, which is a savings account, but he can withdraw from it when he needs some money.

It’s up to you to decide if they should have a credit card, but we decided that their basic needs are met by us.They don’t need anything else. Whatever else they want is not a need, so they should rather save up for it than go into debt.

Teach Them Why Debt Has Negative Consequences

Debt management is not just about paying back what you’ve loaned, but also trying to avoid debt in the first place. If your child is lucky enough to go to college, you might have been saving for their college fund.

They should understand how long it took to save up for this and what you had to forego to be able to set this money aside every month. Make sure they understand that paying back a loan comes with interest. Show them how much more they have to pay the longer they take to pay back a loan.

When your car goes in for a service, take them to the garage with you, so that they can hear you discussing the costs of replacing the brake pads. Show them that similar items might cost more in different shops, and why it’s beneficial to shop around to find good deals.

Sometimes you might have to forego buying something because you just don’t have enough money for it right now. Show your teen that it’s okay. Many things we think are needs are actually wants, and we can get by without them.

Financial education for kids can be learned in both ways either by teaching them regarding money, savings or show them some real-life examples that how you spend your hard-earned, savings so they easily understood money’s importance in their life.

financial education, Financial freedom, money management

How to make your teens financial secure

Posted on August 26, 2021August 26, 2021 by Tim Connolly

For families in today’s time, finances are a big issue and with growing costs of living, managing a kid while going through a financial crisis can be hard but it is a reality one can’t run away from. It may pose as a hindrance in the growth and development of your child.

Many families go through these harsh circumstances but it is the job of the parents to ensure financial education for kids must be implemented at an early age. Here is how you can manage your kid and also make them aware of the circumstance.

You must talk to your kids about the financial situation. Even if you do not wish to communicate all specifics, they should at least have an idea about the current position of your savings. Tell them whether the financial crisis entails moving, cutting on expenses or what needs to be sacrificed.

Kids love going on picnics and vacations but this is something you must avoid during a financial crisis. So explain to your kid why they should not insist on going on leisure trips until your situation improves.

If you constantly worry about the financial burden, you might take it out on your kid because raising kids can be a huge expense. Do not explode because it becomes very scary for children to see their parent in turmoil.

Kids can relate to circumstances through fiction, whether it is cartoons, movies or story characters. Read books or narrate them stories which match with your real life so they can understand it better. Such stories can also comfort the kids by telling them that though things might be tough now, they will get better.

Share your hardships:

Yes, you might not feel it necessary to overburden your kid with your own problem but sometimes, talking to your kid can act as a confidence booster. Once you know that they will comprehend the situation and stand by you, you get the necessary will to move forward.

Take your kids out while purchasing stuffs for home:

While shopping for essentials or going grocery shopping, take your kid with you so they can learn how to buy wisely. Pick out stores that give good discounts, use coupons and let your child also understand the process of doing the same.

Keep motivating them:

Children are sensitive and might feel left out from other kids when they have to deal with such situation at home. Motivate them and ensure that they know there are always solutions to problems. Talk to them about the problems so they can also start thinking about the solutions.

financial education, Kids, money management, teaching teens

Techniques to teach kids how to save money

Posted on August 25, 2021August 27, 2021 by Tim Connolly

Teach kids about money with actual money

In a world where anything can be purchased with the swipe of a card or typing of a password, the simple reality of cash can help teach the value of a dollar. That’s why using physical currency can be a smart way to teach kids about money. Counting coins and bills can also help preschoolers with hand-eye coordination and math skills.

Give an allowance

Giving financial education to kids is a good way to start teaching them how to save. A good rule of thumb is to pay $1 for every year of their age, so the incentive grows as they do. Make sure the allowance is based on completed chores, though. That way, kids understand that money is earned.

See the savings

Using a clear container as a bank can help give kids a sense of accomplishment watching the coins and dollars stack up. Make goals visible by marking a line on the side of the container as a target to reach. Not only does this teach children about saving, it makes reaching goals exciting and fun.

Teach children to allocate their savings

To introduce money management, as well as delayed gratification and charity, encourage your child to divide their money into three piles: savings, spending and sharing.

Set saving goals

Help your child develop savings targets to make sure savings isn’t an open-ended concept. The first goals should be reachable, fun and defined by both the parent and child. Sure, it may seem silly to save for a small toy, but the sense of achievement is worth it.

Teach kids about saving money in a bank account

As your child matures and has accumulated at least $100 in long-term savings, look into a bank savings account. Most major banks offer children’s savings accounts that can be opened online or at a local branch. A trip to the bank may be a new and fascinating experience for your child, inspiring a sense of maturity and financial responsibility. It’s also a great time to teach kids about other money concepts, like interest and risk.

Have conversations about saving

The best tool for money management is conversation. Parents should talk to their kids about money matters like budgeting and investing. Aim to mirror good money behaviors, but remember it’s also okay to admit to your own money mistakes.

financial education, Financial freedom, Kids, money management

Teaching kids the value of money

Posted on August 25, 2021August 26, 2021 by Tim Connolly

In an increasingly digital world, the value of money can be a difficult concept for children to grasp. Here are some tips for helping your children and grandchildren become wealthy and wise. When you were young, do you remember standing next to mum or dad at the corner shop and watching them count out notes and coins to pay for the bread and milk? This was a valuable lesson about the purpose and value of money.

Fast forward to today few corner shops exist and the days of counting change are almost over. When our children see us pay for something at the shopping center, it’s likely to be with a piece of plastic or even by mobile phone. That’s why it’s now more crucial than ever to consciously teach your children and grandchildren about money: how to spend it and how to save it. Here are five ways to do it.

Give them pocket money

Pocket money is one of the best techniques used for how to teach kids about money and the most powerful ways to teach children the value of cash which is why it should be earned rather than given freely. Whether it’s payment for completing chores or a reward for behaving well, children will understand very quickly that money has value. You can also separate their pocket money into portions for spending and saving, so they’ll learn how to put money aside for the future.

Set up a bank account

By setting up a bank account for your child, you can teach them the basics of everyday banking. It’s worth discussing the statements with them when they arrive – not only so you can explain what each part means, but also so you can check their progress towards their savings goals and praise them as they reach each milestone. You might even open a separate savings account to help making saving fun and easy.

Make money fun

Learning about money doesn’t have to be another chore: there are plenty of games you can use to teach kids financial literacy. From a young age, you can play-act spending situations with your kids, like pretending to ‘shop’ with their toys or using food items in the kitchen.

As your children get older, these games can become more advanced. In fact, one of the best ways may be through playing Monopoly – which you can use to teach more complex concepts like rent and taxes. It’s so important to remember that what we teach our children about money when they are young, will impact on their financial future. It’s our responsibility to raise money smart kids.