When you think about all the things you need or want to teach your kids, where does money fall for you? At what age do you think it is best to teach your kids about money? While your elementary school-age child may not understand about balancing a checkbook or paying bills, he or she is old enough to learn about savings and spending money. It may seem daunting at first, but once you start the conversation about money, the rest will flow pretty naturally. If you pay your child an allowance, it is the perfect time to begin teaching them about money. I have been asked by T. Rowe Price and Scholastic Parent & Child magazine to discuss teaching kids about money in this post. Opinions are my own.
The earlier you can begin that financial conversation with your kids, the more likely you are to have children who grow up to be financially responsible adults. If you have small conversations about money throughout the week, it will make it easier for the kids to digest and for you to talk about it. If you need some help on getting started teaching kids about money, here are a few conversation starters from T. Rowe Price:
- Everyday Money Moments: When you are at the grocery store, the ATM, the bank, or planning your next family vacation, tell the kids what you are doing. Explain how you deposit money in the bank, how the ATM works, and how you save money for the things you want, like that vacation.
- Be a Good Example: Lead by example and be a financially responsible parent. When you walk the walk instead of talking the talk, the kids will take their cues from you.
- Saving Money: Help your child set short- and long-term money-saving goals. This can be for a toy or game they want or a special place they would like to go. Again, if your kids are getting an allowance, they should be taught how to save it as well.
- Be Open About the Subject: Do not make talking about money a taboo subject. You do not need to tell the kids all your financial details, but sharing the basics with them will make talking about money much easier for everyone.
- Make It Fun: Depending on the age, you can make the subject of money fun for the kids. We all know the more fun kids have learning about something, the more likely they are to retain that information.
In the T. Rowe Price 2015 Parents, Kids and Money survey, it was shown that although 69% parents are concerned with setting a good financial example for their kids, there actions might make it more difficult for kids to learn about money. 58% of parents allow their children to make bad decisions themselves as a way of teaching them about money and shockingly, 52% of parents believe that their child should have their own credit card in order to learn about money, and 61% think their child should take out student loans as a way of teaching them about debt and financial responsibility. And—talk about leading by example—a frightening 53% of parents have not made plans for retirement. No wonder 61% of our kids think or know their parents worry about money. So lead by a good example and open the lines of communication about money with your kids early and often. This will pave the path to a bright and responsible financial future for your children.
Be sure to join in the April 15 Twitter Chat at 8 p.m. ET to talk to Scholastic Parent & Child editors and a certified financial planner who specializes in education.
Lorelai @ Life With Lorelai says
Money may be one of the most important lessons you can teach a child. You have some excellent tips. Thanks for sharing at the #HomeMattersParty – we hope to see you again next week. 🙂
Life With Lorelai
Good advise! Thank you for linking up with us on Idea Box link up party!
Heather Serra says
Saving money and teaching them to delay gratification. My boyfriend has fond memories of his parents teaching him to save money…which is good for me because I’m the spender. lol. Great advice!
Life as a Convert says
Number 4 definitely! Children need to be aware of money – good and bad – early on.
Ann Bacciaglia says
My kids have always had to earn there money. We had a chart that listed chores and what they were worth. The kids are teenagers now and seem to be pretty good with money.
Cherri Megasko says
It wasn’t until my younger daughter went to college that I realized how bad of a job i did teaching her about money. By the time she was ready to graduate and start looking for a job, she had no idea if a good salary would be $40,000 or $400,000.
Alyssa C says
These are great tips, I need to start teaching my girls. They think we have tons and tons of money but the truth is we just know how to save! Doesn’t help they think everything we buy for them is cheap haha
I wish I had the knowledge of saving money and only using what I earn when I was a kid/young adult. I think its never too early to start teaching kids.
Great tips! We do teach our son about it and we are totally open to him about our finances and all.
Those are great tips. I agree: it is never too early to teach kids about money
Great tips!! I feel like I need a few more lessons in money myself! HA!
Debi- The Spring Mount 6 Pack says
Great tips. It is never too early. I am trying to teach my kids a sense of money.
Donna L. Ward says
Brett – these are great tips for kids – in the 5th grade my school took us all to the bank to open up a small savings and then led us through how to’s – yet my son didn’t receive any at school training! And, it is sooo important!
I learned about money from a very early age and the concept of savings. I always thank my parents for this because I was able to buy my own house when I was only 21 due to their efforts and teachings.
We used to save money as kids to buy big group presents for the backyard. We saved up for our own swing set with cookie stands in the driveway one summer. I’m sure my parents paid most of the money, but we “earned” it by doing the sales and lots of extra chores. It made us really treat the swing set with care!
I never know when it’s time to start teaching my son! I have a book called give, save, and spend. I’m going to start with that!
Liz Leiro says
These are all great tips! My grandpa used to give me an allowance and I would always save my birthday money. I think one of the best ways to teach kids about money is to help them set a goal for something they want to buy and then reminding them when they want to buy something silly for a dollar how its keeping them from their goal.
Chrystal @ YUM eating says
I started teaching kiddo about money when she came into my life at 3 years old. I think at that time I was pretty much the only one. It really has worked out well for us. She is 10 now and knows if she wants something, she has to earn the money and save for it.
It is defiantly never too early to teach them. My sister taught hers very young and my niece who is now 4 will find a dime or penny n run up to her room and put it in her piggy bank hidden in her room. She loves to save money! LOL
It is never too early is exactly right. When we bought piggy banks for christmas one year and they started saving up money and we made them start using their money to buy their own wants. They started to want less things and appreciate what we bought them a whole lot more.
Michelle @ Dishes and Dust Bunnies says
I couldn’t agree more that it’s never too early to start talking to kids about money and how to manage it. It’s so important to start teaching this early so that they have a good foundation as they grow.
R U S S says
Teaching kids about money ( shouldn’t be considered taboo at home ) & saving is very important. I’d like to add that in teaching, it’s crucial that parents show the value of living within ones means – as this very basic principle if followed will make saving easier. Parents really need to start ’em young.
It’s true that kids walk the walk. I followed my mom’s standards of spending for years and didn’t even realize it. What a better road I would have had if I had just realized that early on! Her spending habits weren’t (and aren’t) good ones to follow. 😉
I never thought about this. What a great idea, I will have to incorporate it somehow into our homeschooling. It’s so important they learn so why not!
Aisha Kristine Chong says
So true. The earlier you instill with kids the value of money, the better. 🙂
Chubskulit Rose says
I definitely agree with you. We started a personal savings for our kids when they were born and now that they are older, they deposit whenever they receive monetary gift from someone.
For years I taught a Personal Finance class to high school kids and I was saddened at their lack of basic knowledge of handling money. It’s never too early to teach kids about money and all of your tips are spot on.
lisa @bitesforbabies says
These are great tips! My son just turned four and we talk about money all the time. He has a piggy bank and we’ve been having him ‘save up’ money so he can buy himself something!
Rebecca Swenor says
This is a great post indeed. It is so important for parents to teach their kids about money and how to save it. My kids learned to count and add with coins. Thanks for sharing.
Rebecca Swenor says
This is a great post indeed. It is so important for parents to teach their kids about money and how to save it. My kids learned to count and add with coins. Thanks for shairng.
Fi Ní Neachtáin says
I hope to set a good example for my son with saving money. He has a bank account and a piggy bank and I hope he’ll always spend wisely with them.
It’s not a bad idea to teach them young, but it isn’t something they need to worry about at that age.
Cia | CiaSays.com says
2 of my daughters are really conscious about money. They love to save save save save. Kids are never too young to learn good habits.
John Lopez says
Love this great tips! Actually my kids are now saving their own money and they’re not spending so much, some of this tips I might need to apply on my two kids.
Bonnie @ wemake7 says
This topic is very important. Thanks for sharing about the Twitter Party, I’m hoping I can attend.
I agree – it’s definitely important to teach little ones about money! Great post!
Liz Mays says
There’s just so much to teach them about money. It’s never too early. These are great things to keep in mind!
michele d says
I agree. Saving is hard so start them young. I see nothing wrong with that.
Stacie @ Divine Lifestyle says
Great, great post. It is NEVER too early to teach kids about money. Kids are already very instant gratification oriented. You can’t work with money like that.
Sharon - Her Organized Chaos says
I wrote a post a few months back about teaching children about money and I agree, it’s never too early. They learn what we show them.
Robin Rue (@massholemommy) says
I need to be better about teaching my kids. They think money grows on trees.
These are all so very good ideas. It doesn’t help a child to let them be totally unaware of how the world works with finances, a little at a time, so that they don’t go out into the world and make giant mistakes. Some parents may want their kids to feel unfettered with adult ideas, but it doesn’t do them any favors. The earlier they are to have a sense of financial awareness, the better it will be later.