How to Teach Your Kids About Money
Special guest Money Girl has helpful tips to turn your child into a financial genius. Use these tips to improve your child’s financial literacy and create a solid foundation for a bright future.
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When you have kids, you learn quickly that although parenting is amazing, but it’s also very expensive. The older they get, the more things they want, and many parents struggle to balance not only the cost of all these items but also how to teach their kids about financial responsibility.
Today we’re going to get some expert advice from my colleague, Money Girl, Laura Adams, who has some fun and easy ways that parents can work together with our children to create a solid financial future. Laura is the author of the award-winning book Money Girl’s Smart Moves to Grow Rich, and I’m so excited to have her as a special guest for this episode.
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Here are some questions that Mighty Mommy fans have written in concerning kids and finances:
Mighty Mommy: At what age can we start teaching our kids about money and how can we make it an easy process that they can relate to?
Money Girl: As soon as children start reading or attending pre-school is the perfect time to begin teaching them the ABCs of money. There are fantastic books, games, and kits created for children as young as 4-years-old. Since every child is different, try several different resources to see which ones your child responds to or likes best.
Robin Yang is the author of an award-winning, illustrated series of books called the Enchanted Collar, which teaches young children a variety of money lessons such as saving, banking, and budgeting. Kids will have fun while they learn the importance of being responsible with money.
Another great book, How the Moonjar Was Made, comes from a company called Moonjar. They create fun and easy-to-use products like books, money boxes, and games that teach young children financial concepts to build their dreams. Check them out at moonjar.com or at any online bookseller.
Mighty Mommy: We have older kids, between ages 10 and 14, who haven’t learned much about the value of money yet. What are some suggestions to get them building a positive relationship with money?
Money Girl: Older children typically want to know how to make money so they can purchase gifts for their family or friends, or buy things for themselves. Paying children to do household chores helps them link the concept of work and money. They begin to understand that money is a resource that doesn’t always come easily.
Additionally, once children earn money or receive it as a gift, it’s important that parents teach them how to make it grow by putting it into a savings account to earn interest. When kids understand that money can earn money all by itself, they’ll have an incentive to save, instead of spending it all right away.
Many banks give children tours to explain what a bank is and even let them go in the vault. This is a great way to get children involved and excited about opening up their first savings account.
Mighty Mommy: Let’s talk about allowances. Some families choose to give allowances as a way for their kids to start learning the concept of saving and budgeting—do you have a suggested guideline for how an allowance should be allocated? Example: Savings, Spending, Charity?
Money Girl: No matter if you give children money on a regular basis or ask them to earn it by doing chores, a good motto to teach them is Save, Spend, and Share. You might allow young children to choose how they want to divide up their money. Oftentimes, children are very generous and want to share all of their money.