The Only 3 Things You Need to Teach Your Children About Money
It’s never too early to talk about cash
It’s never too soon to teach your kids the value of a dollar. But where do you start? Here, three important money concepts your kids absolutely need to know.
Save Your Pennies (Literally)
It’s as simple as setting up a jar on the counter. (FYI, a clear jar can actually be more effective than a piggy bank since kids can visually watch their money grow.) For every dollar they earn (through allowance, birthdays, etc.), help them count out 20 percent—so, 20 cents—to put toward savings. When they have five dollars' worth, help them exchange the coins for paper bills so they can really see their efforts adding up.
Create a Wish List—and Budget—Before a Big Buy
If you help kids map out what they want to put their money towards, it teaches them to prioritize money-related goals versus blowing their cash on impulse buys. Encourage them to write out a list of things they’d like to save for—say, a new book or a Hatchimal—and help them rank the list in order of importance. Then, when it’s time to buy, show them how to compare prices (and clip coupons) online so they don’t overspend.
The Importance of Window Shopping
The lesson: Just because you go into a store doesn’t mean you walk out with a new toy. Every time you shop, try to reiterate the purpose of the trip. (For example, you’re buying a gift for Johnny’s birthday.) If they see something they want, encourage them to add it to their wish list and save up. At this age, teaching delayed gratification is key.