The holidays are just around the corner, which is a great time to teach your kids about money management. Maybe your children receive some cash from family members, or perhaps your kids have some leftover birthday money they're eager to spend. Money can quickly burn holes in little pockets. The following strategies will help you teach successful and early money management.
Savvy Savers: Kids are typically not intrinsic savers. Planning ahead isn’t on the top of their priority lists. However, it is important to teach them delayed gratification and how to save for rainy days and more costly items.
There are a few ways you can help your children organize and store their money. One option is the jar system. This tool is great for visual learners, and it doesn’t need to be fancy. Label three mason jars with the words: Give, Save, Spend.
A similar idea is the envelope system. Just like the jars, you can help your children decorate the envelopes to denote Give, Save, and Spend.
Generous Givers: Children learn at an early age that it is important to share things. As adults, we know the importance of giving to others, and we’ve experienced the satisfactory feeling of knowing we’ve helped those in need. These concepts can be instilled in children at a young age.
There are a multitude of ways to teach kids how to help others. Using their money to do it is a great place to start, particularly during the pandemic. This article from the National Military Family Association offers many ideas to help your kids give back if your family is financially able to do so. Find a cause that matters to your children so it feels good when they give. Look around in the community for opportunities to give back during the holidays, whether it be a toy or food drive.
Smart Spenders: For kids, spending their hard-earned money is a reward! Spending money should be fun, but it’s important to show your kids how to plan their spending wisely. Consider helping them create a basic budget.
Make a wish list of things they want to do with their money. Write down their wishes and include any obligations, such as paying you back for that Nerf gun. Money and Stuff offers some savvy budgeting worksheets, along with a wealth of other financial education resources.
Dave Ramsey, a money-management expert and trusted money and business radio personality, also offers an excellent blog on teaching kids about money.
Once they begin to see the fruits of their labor, kids get excited about earning money. Help them to keep going! Work together to set attainable goals. Print a chart like this one from My SunnySide Up Life as a visual aid to motivate your children to keep working toward their goals.
Consider offering a savings match. Set a goal and an end date with your kids and offer to match their total savings.
Imagine your kids experiencing financial security and a debt-free lifestyle. You can help your children attain these goals by making small changes to your own money management.
Let your children see you making wise choices; you know they are always watching you anyway. You can literally change the course of their future, their children’s future, and generations to come.
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