I never learned much about money as a kid, so I’ve been adamant about teaching my son about money. Kids naturally start asking serious questions about money as young as age 5. Maybe they see you buying something at the store or swiping your card at a restaurant drive-thru. It’s important to teach your kids about money so that they understand how it works and can develop a healthy relationship with money at a young age.
Plus, building financial awareness with your kids allows them to avoid common money mistakes when they get older. But let’s face it, money is not the most exciting topic to discuss with your kids. So how do you go about it? Below are 7 creative ways to teach your kids about money.
1. Offer an Allowance, With a Twist
I have not always been a fan of giving an allowance, but my opinion has changed in recent years and I feel this is one of the best ways to teach kids about money. If your kids never have money in their possession, it’s going to be difficult for them to learn how it works and how to manage it properly. That said, I still feel funny about paying my son to help out around the house. I don’t want it to set the precedence that he should expect compensation for completing regular household chores.
So how can you offer an allowance with a twist? I treat it more like a job. My son has certain responsibilities to complete each week around the house. Sometimes, it involves doing chores like sweeping and taking out the garbage. While other times, it involves other projects like helping his dad with yard work or helping me organize our junk closet at home. If he doesn’t do the work, he doesn’t get paid. Therefore, allowance is not guaranteed but hard work and showing up each day is rewarded.
I’ve heard of some parent even printing out ‘job applications’ for different household tasks and projects and sticking them on the fridge. Thay way ‘kids’ could apply to a job that interest them and get paid a certain amount after doing the work. I challenge you to find your own creative way to offer your kids allowance with a twist.
When kids earn money, it gives them a chance to make decisions about how they’ll spend and save. Then, they can witness the effects of their financial decisions first hand.
2. Invite Them to the Budget Meeting
Have a regular budget meeting with your spouse. Invite your child to this meeting if you think they’re old enough to comprehend. You can just invite your child to listen in for a certain part of the meeting like if you’re planning the budget for an upcoming vacation for example. Let them see how you and your partner discuss money in a healthy way and plan for the future.
My family usually has a weekly meeting where we discuss the upcoming calendar and even events or due dates over the next few days. Naturally, money topics come up as we discuss how we will pay for things or plan for certain aspects of the future. Allowing my son to sit in on these weekly family planning meetings is giving him a great example of how families should talk about money and how important it is to plan for your financial future.
3. Play a Game
What child doesn’t like to play games? Luckily, there are plenty of games that will teach people about money. Many of my favorites are board games but I’m sure you can find some online games as well. The Game of Life is similar to monopoly but it teaches kids about the power of education and managing money wisely. As ‘life’ happens to the players of the game, they need to deal with certain financial situations whether it’s a life change like getting married or an accident like a flooded basement. I love how this game allows players to use some of their pretend money to obtain insurance which helps protect against some of life’s unexpected events.
Another great game to consider is Payday. Payday is a classic game where the object is to save the most cash after paying bills and other expenses. Finally, CashFlow for kids is another fun game that teaches kids about assets and liabilities along with investing.
Search for more interesting money games to introduce your kids to on game night. The memories they have playing with you, enjoying snacks, and learning about personal finance will definitely help shape their relationship with money in the future.
4. Start a Business
I’m a little obsessed with child business owners. In general, I think it’s so cool and innovative to take something you’re passionate about and start a business to help others. But to do this as a child is definitely worth recognition. Plus, it can teach kids so many valuable financial lessons early on. Sometimes entrepreneurship is feared by people who were never exposed to it growing up.
I’m not sure if my son will start a business before the age of 18, but I encourage him to embrace an entrepreneur mindset and think about creative ways to diversify income. We also read up about young business owners all the time and how they got started. It’s a great way for me to teach him about profit and loss as well as investing in an idea or concept. When you think about it, when you invest, you’re putting your money into a company that was once someone’s idea or concept. In order to grow your money, you either have to become an entrepreneur in some way or invest in someone else’s company whether as an employee, through the stock market, or by other means.
5. Give Back
Financial literacy isn’t all about spending and saving money. Being generous is also an important aspect. You can teach your kids about money by also encouraging them to give back to others and the community. When I give my son allowance, I often have him split it up into 3 categories: spend, save, and give. He must have a goal he’s saving up for and also give a little money to a cause he cares about.
The homeless in our community is very important to him as well as giving to the church. Teaching your kids the importance of giving shows them how they can use their money for good and to impact others.
6. Head to the Bank
My first banking experience was horrible and I don’t want my kids to go through the same thing. So I made sure my son had a pleasant and positive first banking experience by opening junior savings account for him at a local credit union. It was fun getting to sit down and teach him how to open a bank account. The bank also gave a few free trinkets like a piggy bank as well as coupon to a local ice cream shop. I like that his credit union makes banking special for kids and would sometimes host events for kids and give them a freebie during their birthday month.
This is another great way to show kids how banks work as well as a savings account. My son’s particular savings account gives him a .4% interest rate.
7. Read Books or Watch Videos
There are plenty of books or videos out there to help teach your kids about money. Countless YouTube channels and books specialize in helping kids get to know money. The pictures or videos can help kids get an even better understanding of what’s going on and how they can maybe even start saving too. Videos can be a great way to begin with younger kids then build-up to the books. It all depends on the child through.
As a parent, it’s truly an honor to be able to teach your kids about money and help secure their financial futures. By trying these 7 strategies out, you’ll be setting your kids up for financial success and helping them avoid common and costly money mistakes.