Dare I say, you’ve been teaching kids about money since they were born.
Let that sink in.
When you think about it, what we actually do has much more influence than what we teach, lecture, or discuss.
Money lessons we teach our kids are no different.
The most important way to teach your children about money is to lead by example. Everything else will fall into place.
Let your child see you budget, discuss finances, save up for a goal, work hard to pay off debt. Let them see you say no to buying something because it’s not in the budget or is not what you are choosing to spend your money on.
If you are trying to teach your child to save but they see you buying everything that you want, they will see the hypocrisy. If you buy more than you can afford and take out loans or make payments, they will grow up thinking that’s the answer.
Getting your own finances in order is the first step! Total Money MakeoverIf you don’t know where to start, is a great book to read.
As they see your healthy relationship with money, there are other things you can do to teach your children financial responsibility.
Teaching Kids About Money
It Belongs to God
If you are a believer, this step is a foundation to teaching kids about money. Everything we have comes from and belongs to God! Isn’t that a scary thought? The Bible says “the earth is the Lord’s, and all it contains”. When we use our money wisely, we are using God’s money wisely. As you talk to your children, make sure they know that everything is the Lord’s.
Take them Shopping with You
Even as a preschooler, your child will start picking up on things like price comparisons, saying no to purchasing a food item because there’s not enough money in the grocery budget, and that wanting an item doesn’t mean we need to purchase it.
These little weekly, if not daily, occurrences are being observed and taken in by your children with no extra work by you. Talk to your children as you are shopping so they know what you are doing – turn it into a money lesson and interactive experience.
My parents taught us how to tithe before we could work! Growing up, when we received birthday or Christmas money we got to tithe on it. My kids now get to tithe on their money and will even give beyond the 10%.
Again, lead by example. Let your children see you tithe off of your income. Let them see you give to charities and individuals. You can even get them involved in projects beyond tithing to church. (Like we did with the Operation Christmas Child Shoe boxes.)
Saving money is a part of life. Always will be. This is a skill even a born spender needs to learn.
Teach your kids to set aside a portion of all the money they receive. Just because you received money doesn’t mean you need to spend it all! It’s good to learn patience and self-discipline even if it can be hard – especially when the cash is burning a hole in their pocket.
For young children, consider getting a save, spend, give bank. You can simply label three clean jars (or plastic containers) or you can purchase a bank like this. There are also these cash envelope zippered pouches you could use.
This is a part of saving. Teach your kids to set financial goals. Whether it’s saving money to buy that expensive toy, a laptop, camera, or even to purchase a car or go to college it’s good to set age appropriate goals. Especially for your kids that are “spenders” because having a goal and tracking their progress can help their motivation and willpower stay strong when temptations come up.
For older teens, check out this list of financial goals they can consider as they move toward adulthood.
Teach Them To Work
Money doesn’t grow on trees. Sometimes our kids think it does. Learning to work for money helps teach them the value of money and of hard work. We didn’t get an allowance growing up instead we pitched in and helped around the house (sometimes quite begrudgingly) because we were a part of the family.
We earned money doing extra jobs that weren’t a part of regular chores. Even for young kids you can come up with little tasks (that you know won’t be done perfectly) and pay for their help. This is how it works in our house now.
As your children get older, getting an outside the house job is a great way to earn extra money. Teaching them to work hard as kids and do an excellent job will be appreciated by future employers and will most likely set your kids apart from most of the other employees.
Raising them with that work ethic starts now. (Yep, I know it can be hard. My 5 1/2 year old still thinks any sort of cleaning or picking up is torture.)
Teach them the Dangers of Debt
If you are debt free, you can still talk to your kids about what debt is and why you don’t do it. Tell them how much you would have spent on interest.
If you are in debt, let your children see you working hard to pay it off.
Teach them how to avoid debt and make sure that they know it isn’t required! Culture all around them is telling them that debt is an everyday part of life.
Please, please don’t always tell your children yes. Your kids need to learn that they don’t need to have it all. It’s okay for them to walk away from something they think they want.
They need to see you sticking to your budget even when they are begging for something.
Learning to be content and to appreciate what you already have is so important. Stuff will never satisfy a person – there will always be something else. As a toddler the next flashy toy will grab their attention, Shopkins will be enough until the next fad comes out. Even as adults we are like this. Our phone is great until the newest one comes out. The same thing with cars and houses.
This is something so much easier to learn while you are young, so help your children out.
You might tell them a straight up “no, we aren’t having this in our home” or it might be a “no, we aren’t not buying this for you. If you want it, you’ll have to buy it yourself.”
Teach them to Set a Budget
Once your children are living on their own, they will have no choice but to budget (or else, most likely, get themselves into a financial mess). So do them a favor, and teach them how to budget their money now. It’s a great money lesson and life lesson.
As young kids it might be something as simple as: tithe 10%, spend 40%, save 50%.
When they get older they may want to break down their spending and saving categories further.
Once they are bringing in more money and have more expenses, teach them to write down their income and expenses and make (and stick with) a budget. Car insurance, gas money, cell phone, outings with friends, gifts, trips etc.
Let them learn while you are there to assist and help. Then, when they are off on their own they will (hopefully) simply continue what they already know.
Dave Ramsey has a set of storytime books for kids ages 3-10
Dave Ramsey also has Financial Peace Jr
Larry Burkett has a book Money Matter for Kids
Larry Burkett also has Money Matter for Teens and a workbook as well
Raising our children and teaching kids about money can be a daunting task. One that we won’t ever do perfectly and that’s okay.
Hopefully these ideas on teaching kids about money will help as you are on the parenting journey! You don’t have to make it difficult or time consuming, just start the conversation and begin taking steps to give your children the opportunity to handle money wisely.