As we all know learning about money and finances is critical to survival in the real world, however with the school curriculum so jam-packed the time spent on these critical skills is minimal. As parents and guardians it’s our duty to send our kids into the world with the skills they need for survival and dealing with money can be the most important of all! Kids are never to young to begin teaching them about money – just make the information age specific and have some fun with it! Here are Sue’s 17 Bright Ideas to Teach Kids About Money:
Let them play online games – CBS news rated the 6 best games that teach about money – check some of them out.
Start early – Even small children can start to learn about the value of money and how it works. Teach them that people have to go to work to earn money. Also that if you spend all your money on one item you don’t have any more money to buy other things.
Play shops – Take turns in being the shopkeeper and encourage your child to calculate how much change they should be receiving. Also attribute values to items and show them that sometimes they may not have enough money for the item and may need to save up some more. If children are old enough use actual currency to teach them about the values on the notes and coins.
Teach children about needs and wants– Children can learn that basic foods, rent, electricity, gas, water, and basic clothes are needs, however a large number of items are just wants such as treat foods, fashionable clothing and toys.
Encourage saving – Encourage your kids to save their money instead of spending it. Start a money jar for them and let them see the money growing. Discuss how if they save up they can get a better reward at the end.
Insurance – Teach your kids about insurance and why it is important. Explain that its important to have a Plan B in case things don’t always go to Plan A. For example someone might get sick and be unable to work and earn money, or your property may be damaged and have to be fixed or replaced. Contingencies need to be made for all sorts of unforseen problems.
Teach kids about credit cards – Teach kids how credit cards work and that unless they can pay the balance of their credit card off in full each month they should not be using it. Explain the dangers of credit cards and the high rates of interest that can be payable on them.
Give them a project – Get the older kids to help out with the family finances. For example you could get them to find out the best price for the families car insurance, or get them to help you pay the bills one month. They will probably be surprised by the cost of things!
Pay pocket money – It doesn’t have to be a large amount and its good to base it on a reward for effort system but it does teach them the basics of budgeting, saving and spending. According to some researchers by the time kids are 3 yrs. old you can tell if they are going to be a spender or a saver. What are your kids?
Clothes shopping – The downfall for many when it comes to blowing the budget – and I am not referring to the kids! Give your older children a clothing budget and take them to the shops and help them to spend it wisely i.e.: buy the staples first then see how much it left for the non-essentials.
Let them make their own mistakes – If your child spends all their pocket money and then does not have enough money saved to buy the latest x-box game directly it comes out, that is not the worst thing in the world. Rather than bailing them out straight away and buying it for them, encourage them to save up some of their pocket money so they can buy what they want in the future.
Start a business – I saw a fantastic episode of the American talk show “The View” in which a father had made all his children start their own businesses in order to make money. He supplied all their basics – food, clothes for school etc., but if the wanted any “luxury” items such as designer label sneakers or games etc. they has to earn the money themselves. One boy made and sold cookies, one sold chocolate bars, and an older boy had an online business. Obviously the children were closely monitored for security reasons but they all seemed like very sensible young men.
Teach them to budget – Our templates include a basic household budget to help you stay organised. Include the kids in preparing the budget to show them how it works. Get them to do their own individual budgets including pocket money, income from part time jobs, less clothes, presents for friends, going out money, bank fees etc.
Savings accounts – Start a savings account for your child and encourage them to contribute to it on a weekly or monthly basis. I still remember fondly my CBA savings account set up at school when I started Kindergarten, and my little passbook and tin money box in the shape of an old fashioned banking building (am I showing my age?). Perhaps those fond memories formed the basis for me becoming an accountant!
Groceries – Another of the budget blowout offenders. Give older kids a budget and send them to the supermarket to do the weekly shopping (if you can stand it – if not just for a day or 2). They could surprise you with the bargains they find. Alternatively give them a budget for one meal – say $10 to feed a family of 4 a full dinner and see what they can come up with.
Information security – Teach them the importance of keeping their private information private. Never disclose banking passwords, keep all documentation in a safe and secure place, and destroy unwanted information appropriately. Remember banks will never ask for your personal details by email.
Be a sceptic – Try and instill in them a healthy level of scepticism when given financial advice from others. If something looks too good to be true then it probably is. Consider financial advice carefully and always check the background of people you are considering investing with.
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