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Four Important Money Lessons to Teach Your Kids

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Four Important Money Lessons to Teach Your Kids

If you are a parent, you are likely aware that your kids are watching every move that you make! That said, you want to make sure that you are a great role model. You can do this by cleaning up after yourself, as well as not speaking badly about others, and also by creating excellent financial habits- meaning that you are not spending on frivolous things, clipping coupons and paying your bills on time!

You may think that your kids don’t understand enough about money to really clue into your spending habits- but you are not giving them enough credit. Unless your kids are babies or very young toddlers, your kids know a lot more than you think! And, this is why it is crucial that you start creating excellent financial habits. There is no doubt that you want to be the best role model that you can be for your kids! Let’s go over four methods for teaching your kids how to be responsible with money right now:

1. Tell Your Kids That Money Doesn’t Grow on Trees

When you are out with your kids, you are likely having to go to an ATM to take out cash. They may believe whenever they see cash coming out of the machine, that there is an unlimited amount. However, it is up to you, as the parent to explain to your kids that you don’t have an endless amount of money. Tell them that you and their other parent is working for money, and saving it- so you can take it out when you need it.

Additionally, explain to your kids as well that because you don’t have an unlimited amount of money that you cannot buy them new things all the time. Therefore, this is a good time to tell them why it is important that they take care of their belongings so they can last for a long time. The truth is, you cannot afford to buy them an unlimited amount of stuff! And that is because money does not grow on trees!

2. It is Never Too Early To Introduce Your Kids to The Concept Of Earning Money

Even though kids should learn to pitch in when it comes to cleaning and organizing the home, there is nothing wrong with them earning a little something while they help. That is because, at some point in their lives, they will need to learn about the concept of working for money.

Even though kids should learn to clean up after themselves such as putting their toys back into the toy box once they are done playing with them- you can tell them that if they want to earn some money, they must help clean the kitchen and vacuum the floors! Kids can start learning the concept of earning money for working as young as three years old if they are typically developing.

This will teach them not only about the value of the dollar, but they will learn how to be responsible in general as they mature.

3. Teach Your Kids The Importance of Not Spending Their Money All At Once

Your kids may be tempted to spend their allowance all at once. However, you need to make it clear that spending all of their earnings at once is a very bad idea- and tell them why! Firstly, if your kids realize that they have to save their money, they are learning how to delay gratification which will reduce the chances of them feeling entitled to everything in life as they mature.

You can also take the opportunity to ask your kids what they want to buy. If they want to buy a particular toy, then this is the time to talk about not just working more often to be able to buy it- but you want to make them realize that it is important for them to have money left over after they buy the toy. This is the opportunity to create a budget for your kids.

For instance, if you are giving your kids $5 for an allowance, and the toy they want to buy is $25, then create a rule that they have to have $35 of their own before they can get that toy. Explain to them that the $10 left is the money that they need to save for the future to help pay for something else that they will need later on. Why do they need to care about saving that money for down the road? Explain to them that people can lose jobs or big purchases have to be made unexpectedly. Even though this will not apply to your kids, for the time being, it is best if they learn this fact early on so they can prepare themselves for that possibility in life.

However, aside from that, not only will your child feel proud once he or she is able to buy the toy from the money that was earned- but they are learning that in order to get what you want and need, you need to work for it and it takes time.

4. Teach Your Kids About Saving and Bargains

Allow your kids to watch you clip coupons and look for sales, and explain to them that the reason you are using coupons when you shop is that they will help you save money. Remind them again that money does not grow on trees, and that you have to work hard for your money (and if your child is earning an allowance, they will understand that concept). Therefore, in order for you to save as much money as you can so you can use it for other things in the future, you need to use coupons to do that.

Here is an exercise to try out when you are teaching your kids about saving money and shopping with coupons. Take a notepad and every time you purchase something that is either on sale or with a coupon, put down the full price of the item. Then put down how much the item cost that was either on sale or with the coupon. Subtract the difference, and do this for a month.

After that time is up, show your kids how much money you have saved just in that one month. This way, that money that you saved by using the coupons or taking advantage of the discount will be saved for the future! Because you will always need money in the future no matter what.

The next time you purchase an item that you don’t really need or even really want or don’t look for sales- keep in mind that your kids are watching and they are watching carefully. You are their role model after all. Therefore, you will want to think twice about that!

Miriam Slozberg is a Canadian mom, blogger, astrologer, ghostwriter and freelance writer who has an eccentric sense of humor and way of thinking.

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