5 Tips for Raising Money Smart Kids
If your family is anything like mine, money was a taboo topic growing up. It’s not something we openly discussed around the dinner table. Although I knew when my parents were stressed for a lack of funds, I took it upon myself as a teenager to read as many books about personal finance that I could to gain a greater understanding.
Although financial literacy has improved since I attended school, financial literacy is still largely the responsibility of parents. So, how do parents teach their kids about money, a topic they’re not even comfortable talking about themselves? Here are 5 tips for teaching your kids to be money smart:
- Go Shopping with Your Kids
Grocery shopping may be just another daily errand for you, but it represents the perfect opportunity to teach your kids about money. Allow your kids to help you go shopping for groceries and make decisions on their own. Teach them that money doesn’t grow on trees by giving them a budget to work with. For example, you could say, we only have $15 this week to spend on fruits and vegetables. By buying the red grapes that are on sale instead of the green grapes that are full price, it means more money left over for other items.
- Take Your Kids to a Garage Sale
Another great place to teach your kids about money is at a garage sale. Similar to the supermarket, give your kids a small amount of spending money, say, $5. Let them use it as they see fit. Teach them that they can haggle for a better price. (They might even get a better deal for being so darn cute!)
- Give your Kids an Allowance
Now, I know what you’re thinking. This tip is rather obvious. Parents have been giving their kids allowances for years. Almost every child gets an allowance growing up. While that may be true, most parents make their children earn an allowance by doing chores. Instead of doing that, give your children an allowance to cover their basic expenses, like lunch at school without doing any chores. They’ll quickly learn if they spend their entire weeks’ worth of allowance by buying lunch for five of their friends, they won’t have any money left for the rest of the week, so they’ll have to pack a lunch.
- Visit the Bank with Your Child
Although there isn’t a bank branch on every corner like the old days, it still represents a good learning opportunity for children. Teach your children that money doesn’t just come out of ATMs. You have to actually earn it. Only then will you have money in your bank account. You can also teach your children about paying bills, saving money and help them open their own bank account when they’re old enough.
- Work Towards a Major Purchase
Instead of simply buying your child a new bike, you can teach them the value of a dollar by having them work for it. Now I’m not saying that you should put your 5 year old to work, but if your child is 13 or 14 years old, helping them land their first job shoveling snow or mowing laws can help teach them about the value of money and maybe even give them the entrepreneurial spirit.