As adults, we know … (well at least some of us are learning) that money management is extremely important! Depending on how you were raised, you may or may not have learned the importance of money. Why giving back, and saving are just as important as spending what you earn. We have all heard the term “The rich keep getting richer”, and we believe this has a big part of what you were taught as a child.
If money management is something you are struggling with or something you are interested in instilling in your children, check out the book “Rich Dad Poor Dad” by Robert T. Kiyosaki. Another AMAZING book on teaching you how to get out of debt and live debt free is “Financial Peace” by Dave Ramsey. We are big Dave Ramsey fans. His books have helped Mom Together Founder, Ashlee Nino and her husband clear $15,000 of debt in a year!
On a fun note… here is a super simple project you can do with your kids. If you keep this up, we guarantee they will remember this type of money management and their older self will thank you! Help your kids create their own “Bank.” We took three blank envelopes and labeled them “Spend, Save and Give.” Have your kids decorate them in any way they want.
Now comes the fun part … Allowance! Teaching kids about moneyis so important. You can have them help out with basic age appropriate chores. Make sure to be clear with how much they will be getting paid for completing these “jobs.” Once they have earned their money, explain to them how your bank works. We have to save some, (bills, savings, etc.), Give some (whether you tithe at your church or choose to give to charity) and then you are able to spend what’s left! With Marlo we decided to split his earnings evenly.
At the end of every month Marlo is allowed to give what is in his “Give” envelope and spend what is in his “Spend” envelope. We have decided as a family that we will save his “Save” envelope for a big day like his Birthday or Christmas. This month Marlo has decided to use his “Give” money to buy toys for kids that don’t have any. You could not be any prouder of this little nugget!
There is no right age to teach anything, but it’s okay if you start early, if kids get to know about the proper utilization of money they will be able to apply it better at the later stage of their life.
In the book Rich Dad, Poor Dad by Robert T. Kiyosaki and the two children got to learn the basics of money at a minimum age.
Nowadays, most of the adults struggle in handling finance and end up wasting their hard-earned money every month and regret it later. So it is imperative to get into financial conversations with your children and teach them about the importance of money handling.
HOW TO TEACH IMPORTANCE OF MONEY TO KIDS?
Being a parent is a tough task but can be fun and fruitful if you do it the right way so here we have compiled a few ideas of teaching kids about money
INSPIRE KIDS TO EARN MONEY
Assigning your kids to do chores for extra cash or reward is a great way to start teaching them the concept of money. It can be anything: washing clothes, cars, dishes, cleaning the house, or completing any work for a reasonable amount of money could help them learn that money can be earned.
And not just money they can learn many other things though these tasks- how to do household chores, management, and entrepreneurship is a bonus which they can learn and apply at an early stage.
Having an entrepreneurship mindset from an early age would help them to think differently and to think of ways of earning money.
ASK THEM TO READ BOOKS AND WATCH VIDEOS
A lot can be learned when you surround yourself with the right mindset of people, and in today’s era of technology, everything is just one click away. Surround them with books and video from where they can learn more about the utilization of money.
GOAL SETTING
Take a small step and give them a reason to earn money, spend it, and save it wisely. Start by getting into a conversation with them about why they want to make money; this can give fuel to their thought process. Goal setting is essential, studies suggest that people who set goals are more successful.
Help them to set specific and realistic goals that can be achieved.
TEACH THEM WAYS TO SPEND SMARTER AND WISELY
There are many ways of doing this. For instance, children are not aware of the price of the things they are demanding, but won’t it be good if they know the worth of stuff?
They might be surprised to know that the prices of items can drop if they wait for some time. Informing them about sales, brands, and using coupon codes can teach them the worth of money and spending them wisely.
You can ask your kids to keep a record of their spending and evaluate what things were important and what they want to change.
Ask them to calculate the number of hours they have to work for the amount of money they require for purchasing something they demand and ask if it’s worth it?
TEACHING THE FUNDAMENTALS OF SAVING
Children usually may want to spend the money they got the next second into useless things, but giving them the idea of saving the money and the advantages of it can help them in learning the importance of saving money.
Ask them to make a goal for example-save for a toy they want, ask them to keep a record of the amount of money saved so that they can know the progress they are making towards their goal.
INCULCATE GIVING BACK HABITS
There are numerous ways in which you can teach them about money and why it’s essential to give back to people around them. Donating old clothes, helping older citizens, and donating toys they no longer want is some of how they can help people and ask them to give a small amount of money to charitable organizations. These habits will teach generosity and kindness to them.
DEVELOP PRACTICAL SKILL AND TELL THEM ITS VALUE
No one wants their child to do household chores. But it is crucial to keep in mind that when they start to live on their own, they may find it very hard to manage the household work and then they will spend their money on laundry, food, etc.
They might not want to do the chores now but will thank you letter for teaching them the tips, tricks, and shortcuts in doing household chores.
BASIC INVESTING
It’s never too late to learn about investing. Introduce them to passive investing i.e., spending some amount in a few things and not buying or selling it very frequently, and this basic investing can be exceptional learning before they start to learn more. Give them books to learn about the basic principle of investing. The book “The Little Red Hen” would be an excellent start for your child.
CREDIT CONCEPT
Using a credit card is not wrong, but giving them proper knowledge about it would help them in getting into debt. And credit cards can also help them in keeping track of their expenses and earning rewards.
A topic that I’ve seen written about quite a bit lately is the proper time to start Teaching Teens About Money. And frankly, some of the advice I’ve read borders on the ridiculous. I have actually heard some people claim that you should start teaching your children about money as early as age 2! That seems to me like overkill. I doubt that a child of that age can even process whatever you might be teaching them, let alone retain it.
Here’s what I’ve learned as parent about kids and money.
Let Kids Be Kids
My son just turned 4, and it is very important to me that he grows up with the proper perspective on money and good financial habits, such as saving. But I have yet to have any kind of serious conversation with him about the right way to handle money. Why? Because he’s 4 years old! Childhood is a special time, and for the most part, it should be filled with fun. Certainly learning plays a major role in childhood, and there are good financial lessons to teach kids about money, but there’s just no point spending much time with toddlers talking about money.
Teach Them through Your Actions
However, just because I’ve yet to specifically discuss money with my son does not mean that I haven’t started teaching him good habits. I do it through my actions. Children learn a lot more from the actions of the adults in their lives than most people realize. I think my son understands, or is at least absorbing, what I am doing when we are out shopping and I am choosy about what I buy based on the price. He especially likes it when I announce, “OK, now that I saved some money on that, we can go get you a new toy!” Those kinds of lessons speak volumes. Teaching kids about money is especially important if you’re going through tough financial times.
Keep the Spoiling to a Minimum
Another way that I teach my son about money is by not “spoiling” him with toys and gifts. When I was a child, my parents didn’t have much money, so being spoiled wasn’t an option. Because of this, I was able to get a lot of great financial advice from my parents.
Even though I do have the means to spoil my child if I wanted to, I think that sends the wrong message. If my son had his way, we would go to the store every single day and buy a new toy. But we don’t. If we did, my son would learn that money is in infinite supply and that it can be spent on whatever he wants, whenever he wants. I provide for my son, and he probably has a few more toys than he should, but he’s certainly not spoiled.
What Is the Right Age?
So when should you start teaching your kids about money? I am no child “expert,” but I can tell you one thing – it isn’t at age 2. I don’t have a specific timeline for when I’ll start, but I am guessing it will be around age 5. But there’s no reason to rush into this with your kids – childhood is a time for goofing around in the backyard, dressing baby dolls with pink dresses, and learning how to play nice with others. Lessons about money can be put on the back burner for a little while, so your kid can just enjoy being a kid.
What are your thoughts on the right age to teach kids about money? Do you have a number in mind?
Allowances: Good or bad? I asked 18 parents for their opinions on three types of money dispensation for kids: Allowances pegged to performing household tasks; Set-amount allowances distributed unconditionally; No allowance at all.
Emotions run surprisingly high on this topic, which makes me believe there is no absolute right or wrong. In the end, it’s more about how parents manage to provide financial education to kids.
The majority of parents I surveyed like allowances pegged to chores based on a simple belief that if children have to earn money, they’ll likely be choosier about their purchases. My neighbor’s 7th grade daughter lost her iPod touch on the heels of buying $50 PJ bottoms at an upscale store for pajama day at school. Not only did she dislike the PJs two weeks later, she wished she still had the $50 to start saving for a new electronic device. Now she needs to start over, chore by chore, to replenish her funds.
Parents need to be fair, though, about the price of chores. If you’d pay a stranger $20 to shovel the driveway, your child shouldn’t get $10.
ON THE DOLE
A set allowance not pegged to chores supposes that kids need a certain amount of money as they get older, and will manage discretionary spending and saving with what is doled out. Chores are unpaid because all family members must pitch in. This is great in theory, but often harder to control without nagging.
I find that my friends who are constantly on the go with busy schedules find this approach the most convenient. However, I got a lot of hemming and hawing when I asked them if they have financial discussions that accompany the allowance.
Tom Walter, a financial planner and creator of a money course for Naperville 8th graders, has a different perspective. “What are we teaching our kids if they get an allowance for no work? We are saying, ‘Mom and Dad will always support you,’ and that isn’t how the world works. It causes a dependency that later in life can cripple adults from being on their own and successful.”
LET’S MAKE A DEAL
Offering no allowance has its advantages and disadvantages. On the plus side, it gives parents the opportunity to discuss what expenses will be absorbed by Mom and Dad, “discuss” being the operative word.
When our freshman son begged for $100 sandals when $50 sandals would do, we discussed splitting the cost 50-50. After protestations, he “found” Christmas money to finance the purchase. He took excellent care of those sandals. That same year, he got a job as a golf caddy to avoid dealing with us every time he wanted to spend money. Unfortunately, he also felt no need to save since he was the master of his own financial destiny.
WHICH SYSTEM WORKS BEST?
Lewis Mandell, the former dean of business at SUNY, has studied decades of allowance research. “The prevailing wisdom is that allowances are a wonderful way to train kids to be financially literate.” Kids who did the worst on financial literacy tests were the ones who received an unconditional allowance. Interestingly, the next highest were kids who did chores for money, with the highest financial literacy scores coming from those who didn’t have an allowance.
Mandell explains that rather than using allowances as instruments for teachable moments, some parents employ them as a way of avoiding the money subject altogether.
According to most money experts, the bottom line is that if you do allowance poorly, you’re setting your kids up to be worst off than if you didn’t offer allowances at all.
. For what it’s worth, here’s the non-scientific results on each method.
The majority of parents I surveyed like allowances pegged to chores based on a simple belief that if children have to earn money, they’ll likely be choosier about their purchases. My neighbor’s 7th grade daughter lost her iPod touch on the heels of buying $50 PJ bottoms at an upscale store for pajama day at school. Not only did she dislike the PJs two weeks later, she wished she still had the $50 to start saving for a new electronic device. Now she needs to start over, chore by chore, to replenish her funds.
Parents need to be fair, though, about the price of chores. If you’d pay a stranger $20 to shovel the driveway, your child shouldn’t get $10.
A set allowance not pegged to chores supposes that kids need a certain amount of money as they get older, and will manage discretionary spending and saving with what is doled out. Chores are unpaid because all family members must pitch in. This is great in theory, but often harder to control without nagging.
I find that my friends who are constantly on the go with busy schedules find this approach the most convenient. However, I got a lot of hemming and hawing when I asked them if they have financial discussions that accompany the allowance.
Tom Walter, a financial planner and creator of a money course for Naperville 8th graders, has a different perspective. “What are we teaching our kids if they get an allowance for no work? We are saying, ‘Mom and Dad will always support you,’ and that isn’t how the world works. It causes a dependency that later in life can cripple adults from being on their own and successful.”
LET’S MAKE A DEAL
Offering no allowance has its advantages and disadvantages. On the plus side, it gives parents the opportunity to discuss what expenses will be absorbed by Mom and Dad, “discuss” being the operative word.
When our freshman son begged for $100 sandals when $50 sandals would do, we discussed splitting the cost 50-50. After protestations, he “found” Christmas money to finance the purchase. He took excellent care of those sandals. That same year, he got a job as a golf caddy to avoid dealing with us every time he wanted to spend money. Unfortunately, he also felt no need to save since he was the master of his own financial destiny.
WHICH SYSTEM WORKS BEST?
Lewis Mandell, the former dean of business at SUNY, has studied decades of allowance research. “The prevailing wisdom is that allowances are a wonderful way to train kids to be financially literate.” Kids who did the worst on financial literacy tests were the ones who received an unconditional allowance. Interestingly, the next highest were kids who did chores for money, with the highest financial literacy scores coming from those who didn’t have an allowance.
Mandell explains that rather than using allowances as instruments for teachable moments, some parents employ them as a way of avoiding the money subject altogether.
According to most money experts, the bottom line is that if you do allowance poorly, you’re setting your kids up to be worst off than if you didn’t offer allowances at all.
Knowing how to budget is incredibly important. Creating a realistic budget and sticking with it can save us from making major financial mistakes, including living beyond our means and incurring credit card debt. I wish budgeting was taught at school, but as far as I know it isn’t, and so it’s up to us parents to teach our kids how to budget. Fortunately, life creates many opportunities for us to do so.
This is what we do with our own kids to help them learn the concept of budgeting:
Monthly Allowance
Giving a monthly allowance is probably the best way to Teach Teens About Money management. A monthly allowance will help then learn that they have a set amount of money for the month, and that they must be able to stretch that money until the next “payday.”
Store Budget
When I take my pre-teen daughters clothes shopping (one of their favorite activities these days – BIG surprise :)) I like to give them a set budget for that particular store visit. So, we might agree that I will purchase the necessities (basic new fall clothes such as tops and jeans), and they can pick a few “fun” items such as fashion tops, scarves, or excessively torn jeans – the kind that is not allowed at their school.
I love watching them carefully budget when we do this. Say they have a $50 budget that day. They go through the store, pick the items they like, try them on, and then, once they have a few items they absolutely love, they go through the difficult process of deciding which of the garments they will give up.
I love this process because I believe it reinforces that you do NOT take all the items and finance your purchase with debt. Staying within your budget means sacrificing and giving up on things. I want them to learn at a young age that they don’t have to buy everything they want or like. That it’s OK to tell yourself, “I love this item, but I can’t afford it,” and put it back on the
Paying for Non-Necessities
Of course, for the model above to work, the kids should be the ones paying for non-necessities. If we were to buy them everything they wanted, we wouldn’t have been able to create opportunities for them to learn how to budget and spend one’s money wisely. So in our family, we pay for necessities (what exactly this includes is up to each family to decide) and the kids pay for extras. Very torn jeans that are not allowed at school are a good example of what might be considered as an “extra!”
Talk About Money, Cost of Things, and Budgeting
When it comes to teaching my kids I usually prefer showing by example, but sometimes talking is important too. In our family, money is NOT something we avoid talking about. We talk about money, and we share our own dilemmas and decisions with our kids. For example, when shopping with them, even when we pay, we keep the discussion going about prices of items, what do those prices mean in the context of our budget, and why we prefer to look for items on sale or won’t buy overpriced cherries at the beginning of the season.
We also discuss larger family expenses with them. For example, we recently had a conversation about their private school tuition. We’re Jewish, and have decided to send them to a Jewish private school for 6 years (kindergarten and elementary school) to teach them basic Jewish concepts and Hebrew. For middle school, we’re planning to move them to the excellent local public school system (can’t wait).
So we talked about the total cost for six years of private school for both of them. They were shocked to realize that the cost is comparable to the price of a house in some areas (but not in the expensive Bay Area of California!), and that the tuition money could have bought us a shiny new car each year. I think it was a good discussion, because it made them realize that during those six years when Jewish education was a priority, we gave up on other things. One of the most important concepts of budgeting is to accept that you can’t have it all, and that if you choose to pay for something, you will have to give up something else, so it’s all about prioritizing.
We also talked about the kids’ 529 accounts and the total cost of college. Again, we compared that to the price of a house, of a car, of clothing – trying to help them grasp the meaning of these numbers and realize that Mom and Dad are cutting in other areas in order to finance the incredibly high cost of higher education.
The Basic Message: You CAN’T Have It All
One of the things that gets people into financial trouble is a sense of entitlement – the belief that they “deserve” certain things, maybe because “everyone else” seems to have them, and so they buy these things with credit, even if they can’t really afford them. One of my major goals with my kids is to drill into them that they should not expect to have it all. On the contrary, they should fully expect to give up certain things in order to finance other things that are more important to them.
Money, may not make the world go, but it definitely is one crucial element that keeps life on track. So among the important life lessons that parents feel the need to teach their children, teaching kids about money and making them aware of the financial responsibilities that they will have to take on as they grow up, is of utmost importance.
It is not an easy task, as finances are complicated always, even for adults. So for kids who’ve never know nothing of where all things they love have come from, it sure will be a challenging task to comprehend the mechanisms of the financial world. But then waiting for them to grow up and then introduce the whole concept, will probably be too late for them to embrace it conveniently. Therefore, start soon.
Here are a few easy ways to teach and make children aware of the significance of money and how to save it to make life better
From early on in life, your kids should know how hard you and your partner have worked and are working to secure him the comfortable home he lives in. This does not mean that you start price tagging everything around, like, the stroller cost us this much or we paid that much for the dress you are wearing or we pay this amount of EMI for the house that shelters us.
Be careful and subtle, the purpose should be to let the child have the realization that one needs to work hard for every comfort in life. So it should be like- “You know why we love this house? Because daddy and I worked hard for years to earn enough to buy it.” or “Baby, be careful not to spoil the dress because it will be a long time before we buy such an expensive dress for you again.”
Work for the things you want
Teach them how hard work helps to earns things that they want. From early on in life, encourage kids to help you with domestic chores like making their bed,setting the table, dusting etc. to earn their daily allowance. As they grow up the works may also get more serious like mowing lawns or cleaning the car etc. This will help kids value everything they want, because they will not just get them rather will work to earn them. It will set them to the path of success, as they’ll not hesitate to work hard to get their desires fulfilled.
Keeping Your Money Safe
When your kids get pocket money, or money as a reward for their help and work, teach them to safe keep their ‘own money.’ Make them understand that they don’t have to spend it all if there is no immediate need. This will help them money management and initiate their savings. So introduce the age old ‘piggy bank’ to your kid. Encourage them to put any money they get as allowances or gifts in their piggy bank regularly, and keep a note of how much has gone in there. Later, you may open saving accounts for them in a bank.
Planning for future
Inculcating a habit of saving will in turn help them to learn another important lesson regarding saving and that is planning for the future. So show them the brighter picture of keeping from spending uselessly now so that they may spend it on a worthy thing later. For example explain them how not spending on cheap candies and wafers can help them to save for the remote control car. And when, one day suddenly they see something in the market and desire it, show them how it’s their great fortune to have it because they had saved for future. This will teach them a great lesson about sudden financial burdens and how saving help in coming out of them.
Distinguishing between Wants and Needs
First of all, parents must teach their children to learn distinguishing between their wants and needs. Next, to fulfill both, they themselves should be responsible. So if they lost a pencil box and ‘need’ a new one, encourage them to use their own allowance or if the old one is still intact but they ‘want/desire’ a new one because it’s more fancy and everyone in class has it, then too they should only dig in their own pockets. However, in the latter scenario make them see the other side of the picture- the things they could have bought had they chosen not to give in to their desire, like they already had a pencil box, and could have added a new crayon kit to it, but now only have one waste and one new pencil box.
Borrowing Should Be the Last Resort
Now when the realization of having and keeping and saving money has got into your child’s brain, make them understand, how important it is to be self reliant always. However, not always can they bear their expenses and why would they, they are still kids. But the only reason why you need to make them spend their own money on certain things is to help them realize the value of money, and therefore, even if they run out of money don’t pay for things they are supposed to manage on their own. Here you may introduce the system of borrowing, but making it very clear how it should always be their last resort, because ultimately the money will come from their own pocket, and that they may have to pay more than the original amount as interest.
Teach them the limits
For children it may not come easy to understand why everything they like cannot be owned, and why everything a friend owns may not be in your means to afford. So fixing a pocket money is an easy way to fix their limits. For instance, if you’ve set a weekly allowance of Rs100 for them, they will have to manage in that amount no matter how. Explain to them, how people’s earnings vary, and it is according to the amount they have that they spend and not the other way round.
Teach Them Not To Be A Miser
In your effort to instill a habit of saving in your kid, don’t turn him into a miser. Again the ‘needs and desires’ distinction will work. Explain them how futile is the task of saving for a future luxury by forgoing the present needs. For example, if one saves for a movie ticket all week by sacrificing his canteen allowance and starving himself, then falling sick on the very day of the movie, how unfortunate that will be. Explain to the child, while saving is important, one has to spend on what is important and cannot ignore it. Also, that when someone is in need, lending a helping hand is always the right thing to do.
Every parent wants their kids to get the best of education in best of schools. They want them to grow up and pursue a good career with lot of prosperity. Well, during raising children parents often forget to teach their children the financial responsibilities wherein it is important to know how to save money.
You may ignore the fact that your kids should learn how to save money right from their childhood. Still, if you think you missed on teaching them you can follow the ways illustrated in this article to teach kids about money at any age.
Discuss about money with your kids and in their presence
If you have not been discussing about money earlier with your kids or even when they are present around you, then you can still start talking about money management in front of them. You can start talking to them about financial matter, savings, negotiations etc to help them understand the importance of saving money for crisis or for the retirement. Help them understand to make smart decisions.
Do not hesitate to speak about money matters with them. You can discuss with them about how to manage money and spend responsibly to avoid falling short of money in need.
Use fake printable money to teach them money matters
In order to support your lessons and make it bit practical you can print some fake money to teach your kids better. You can give them these fake prints to learn how to spend hard earned money wisely.
Tell them the importance of saving money in the bank. You can explain them each and every thing with reasons to make sure they understand the facts better and come up with questions. When they ask questions, you can support your answers with examples which can be from your daily life.
Let them use fake printable money to understand the money transaction well. This will give them the confidence of dealing with money themselves. You can appreciate them for every decision they make regarding money matters.
Pay them for chores
You can help your child learn the value of money and hard work. Ask them to do some chores and pay them for that. You can increase the rate quarterly or yearly to encourage them. Also, let them know that there are certain household tasks that should be done for the family and they should be done as a help and family responsibility and not wages.
Appreciate efforts and teach discipline
While you appreciate their learning, try not to be lenient with them when they fall in short of cash and want to buy something. Do not buy for them and teach them how it feels when you do not have enough money and that is because you haven’t planned your spending properly. Also, teach them that they need to take care of their budget before they want to spend.
Get them into habit of saving money
You can help the younger kids into habit of saving money and ask them to save money in their piggy bank or an envelope. They will be happy to see their money increasing every month. You can assign them chores that suit their age and pay for the same. Tell them to plan out their spending and savings accordingly.
Also, let them know that they won’t be paid extra if they fall in short of cash due to unnecessary spending.
Teach them to divide money to spend, save and donate
You can help your kid learn the importance of charity and why they should donate some portion of money they earned to the needy. Ask them to divide money into 3 portions. They can divide the money to spend, save and donate.
Help them learn the importance of interest rates
If your child is old enough to understand the value of interest rates you can explain them how keeping their money in bank can help them get interest rates and this way they can multiply their money.
Let them know that it is not only about saving money in bank if you are not able to multiply money. Help them understand that saving your money in the right way can help them multiply their money on a regular basis. This is indeed a smart idea.
Keep motivating your kids and discuss how they can save money such as selecting the right utility saving expert. Let them decide on their own. Do not forget to appreciate them for every decision they make and help them learn from each mistake.
Do not rush to make them financial experts, go slow and help them learn with each coming day and situation. You will see how kids pick up really fast and enjoy saving money and utilizing it in the right way.
Whether it’s drafting a new family budget or making financial resolutions, money is a common topic at the start of the new year. Here are some tips for making 2020 the year of financial education for kids.
Talk about money with your kids.
In his book, “The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money,” Ron Lieber urges parents to talk about finances with kids. Demystifying the topic can seem daunting, but it’s important. “Given how much we invest in them, talking about what we spend and save and give away, and why, is one of the important legacies we can leave them,” Lieber writes.
NYT best-selling author and personal finance expert Nicole Lapin agrees, explaining that “the more you explain about how you handle money, the more you instill your values in your child.” In talking about money, parents demystify money and make it less intimidating, which makes it easier to learn about and sets them up for good financial habits down the road.
It’s not only okay for your kids to see you working on a budget for 2019, it sets a great example.
Explain credit scores to your kids and check your score for accuracy.
Explain credit scores to kids who are tweens or older in terms that they can understand—it’s similar to a financial report card.
It’s a good idea to check your credit score annually, especially because you can do so for free here. Lapin says that it’s not only important to know where you stand financially, but you also should look for mistakes. She learned the importance of doing so first-hand when hers showed charges from a doctor in Texas, a state in which she had never received medical treatment. “Problems only get worse if you don’t check,” she says.
Use apps to save.
Lapin has two apps she recommends for saving. The first is Honey, which automatically searches for coupon codes before you check out of a site. (I tried it out over the holidays and found it really helpful!) Have your kids help you order a gift online for the next birthday party. Doing so is an opportunity to talk about comparing prices, taxes and how much you can save with a sale or coupon.
Zelle is another app she recommends. It’s a way to split costs, whether that’s for a dinner out with friends or for the group gift to the coach or teacher. It can save time and you know what they say—time is money.
Two easy ways to save: cancel unused subscriptions and negotiate your bills.
Check your statements and see if you have any subscriptions that you forgot about or are no longer using. Cancel those.
Lapin also recommends make some calls to negotiate your bills. “Whether checking to see if there’s a better phone plan or lower your cable or streaming charges or see if you can get a better interest rate on your credit card. I talk with families who don’t know those are negotiable, but they are. The worst they can say is no, but if you don’t ask, the answer is always no,” she says.
Learn about our nation’s financial systems.
The Money Museum at the Chicago Federal Reserve Bank is a great place for families to learn about money—from how it’s designed to thwart counterfeiters to what a million dollars really looks like to learning about monetary policy through interactive exhibits.
Teaching your child to put aside money for a rainy day should be one of the key learning’s in your child’s development. This is something a parent should instill in their child from an early age and the financial lessons learnt have the potential to affect the life of your son or daughter for many years to come. Below are some of the most effective ways of money management for children.
Set a Good Example
Parents have much more influence over their children than they often realise. If you save on a regular basis, make sure your child is aware of this. They should also be aware of the benefits of saving. This is easily achieved by showing them what can be done with the money you save up over time.
For example, if you decide to put money aside for a holiday or you want to buy an expensive item, show your child the process behind saving the money to make these purchases, so that they understand what’s involved. Putting away money for a rainy day is also an important lesson you should teach your child.
Create a Goal Chart for Savings
When it comes to saving, setting goals is one of the most effective ways to keep focussed and disciplined. A goal chart that allows your child to set weekly, monthly and annual financial goals makes it much easier to visualise what your child wants to achieve when they are setting aside their money. This exercise also allows your child to prioritise their spending.
Make Saving Money a Fun and Interesting Activity
Talking about money and finance to your child is not always the most exciting topic to discuss with younger members of the family. This is why it’s important to add a fun element to the proceedings. You could involve them in financial decisions that affect the whole family, which makes this activity more interesting.
They also get to feel a certain responsibility that can affect other members of the family too. For example, you could allow your child to help you with the weekly shopping budget, so that they understand how to use a fixed budget wisely and will understand the value of money more.
Open a Savings Account
Many kids start off saving money at home in a piggy bank or a jar. However, it’s often too easy to access these savings, so you should encourage your child to make a habit of depositing their money in a local credit union, bank or post office account.
Reward Your Child
Some kids need an incentive to save their money. Agreeing to reward your child each time they save some money will give your child the incentive they need to keep doing this. The reward could be financial, where you decide to add to the money your child puts away or you could reward them with some other treat.
Teaching your child to regularly save their money is one of the most important habits you can pass on to your son or daughter. The tips above are just some of the most effective ways to do this and have the potential to have a positive influence on your child’s future and the way they deal with the financial aspects of their lives.
Look, I may be honest: I’m probably not the right person to come to for financial advice. So this is really more of a we’re-in-this-together kind of post, where I’m learning right alongside you and doing my best in teaching kids about money
Because they haven’t exactly had the most frugal examples in my husband and me.
We are spenders. Heck, sometimes we are big spenders. But as I’ve transitioned over the years from full-time working mom at a big organization where biweekly pay cheques are de rigueur to full-time blogger with pay cheques that come in fits and spurts, the irregularity of my income has forced me to do things like budget and save.
And I shouldn’t be learning about those things in my mid-40s.
My parents (who are, incidentally, the most amazing people on the planet) coddled us too much, shielding us from the sometimes-harsh realities of money. Although they are the very definition of savers, they never taught my brother and me a thing about the importance of saving money.
All while working middle-class, no-frills 9-to-5 jobs, my parents managed to pay bills on time, buy a series of homes during an era of double-digit mortgage interest rates, get us trendy clothes and eventually send us both to university on the Mom & Dad Scholarship Fund.
They’re now retired and sitting pretty. And they did it all making less than half of our current household income.
I wish along the way they’d shown me how. Or made me value saving money more. Instead, I was handed money when I wanted it. I was no stranger to being given $5 here and there in my teens to go to the movies, and my dad would often slyly slip me a wad of $20s during university visits.
I knew the value of a dollar, because I worked from the time I was 14 years old. But it was all fun money. I never needed to buy necessities or contribute to chores around the house to earn my keep.
That’s a real problem, and it’s not the way I want to raise my own kids.
Not that I’m doing mine any favours, because — so far — I’ve done a pretty terrible job of teaching them how to save. Don’t get me wrong…they have oodles of money in their respective bank accounts for their future education, but that’s because I’ve swiftly taken any cash my kids have been given since birth (birthdays, Christmases, etc.) directly to the bank before they even have a chance to see what’s gone missing.
Is this teaching my kids the importance of saving money? I think not. Because they’ve had no part in it. No skin in the game.
Figuring out how to earn money as a kid isn’t as important as learning how to save it.
How to earn money as a kid
If your kids want to save money, first they’ve got to make some. It’s remarkably easy for kids to make money and it can start early. I’m not advocating child labour or anything, but rather than just giving your kid money for treats, books and stickers (and the other 418 things they’ll ask for in a given day), you can consider asking them to earn it.
Now, the jury is still out for me on allowance. A big part of me believes that kids should help their parents around the house because, you know, they get to live and eat there for free. But I know allowance can make a lot of sense for people who are trying to teach their kids about money management and the importance of saving money.
I don’t think there’s any harm in asking your kids to do a little extra around the house and paying them for it.
But they can also cut neighbours’ lawns, shovel driveways, wash cars, take a local dog for a walk, have a bake sale, and (when they hit 12) start babysitting to make some dough. Paper routes might not be what they used to be unless you’re delivering big-city papers, but when I was young it was an awesome way to earn money.
Kids can also set up lemonade stands, sell DIY jewelry and crafts and go on the hunt for wine and beer bottles to recycle. Teens who excel in certain subjects can make a good hourly rate as tutors.
These just skim the surface, but you get the idea.
How to teach kids about the importance of saving money
Talking with your kids about the importance of saving money shouldn’t be a taboo topic. Financial literacy is just as important as all those other literacies! (Photo credit: Kristen Recalis Photography)
I wish I’d started all of this financial literacy talk with my kids so much earlier, but this is one of those it’s-never-too-late conversations and one that will evolve as my kids get older.
Even teaching preschoolers about money is doable with something as simple as a piggy bank. While mine have always had basic piggy banks, I have seen one that has three slots: save, spend and give. This adds a charitable component that a lot of people will find appealing, too! How you discuss and determine the division of money is obviously your call, but I like that it may also help those wondering how to teach kids to count money as they start dividing it among the different slots.
You don’t need a fancy piggy bank for the save-spend-give idea either. It would work with savings jars just the same, and your in-house crafter would probably have a blast decorating them.
Money activities for kids may also bolster the importance of saving money. Counting money and learning the names for your local coins and bills is a great start. We’re starting to teach our kids how to make change (though that means having actual cash in my wallet!). I love the idea of coin caterpillars and coin-rubbing matching games for younger elementary school-age kids and money-exchange games for bigger kids.
For tweens and especially teens, I think it’s important to start introducing real savings goals using a real bank account. Opening a bank account is a great idea, even if you don’t give your kids access to it for a long (LONG) time. Mine didn’t even know until last year that they had accounts in their names.
If you set up accounts with Tangerine, there are two new features to help Clients (in this case, your kiddo is the Client!) track their spending and achieve even the most aggressive savings goals:
Goals — this lets Clients establish one or multiple savings priorities, like a big class trip or a car. Then, it sets up regular contributions, and provides real-time updates on savings progress (here’s how it works)
Left To Spend — this monitors regular expenses (which can be as basic as a monthly clothing allowance or as big as car insurance for the lucky teen who managed to save enough to buy a car), and calculates how much disposable income you have “left to spend” each month (here’s how it works)
Online banking and banking apps are how most of us keep tabs on our money, so our older kids will need to learn at some point. Why not with you? Features like these may even be something you set-up alongside your teens and dive into and track together.
Because what’s most important is leading by example. I know this; I really do. Our kids need to see us making good financial decisions that consistently illustrate the importance of saving money.
We’re getting there. Breaking habits are hard, but I want to do better for my kids so they don’t end up like me — figuring all of this out in middle age.
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Tim Connolly 
