It’s never too early to start teaching your children about money, and to foster healthy spending and saving habits throughout their lifetime. Too often children are left to learn money skills on their own in college, and this is when they often delve into serious financial trouble as they max out their credit cards and quickly run out of spending cash. Here are six fun and educational ways to teach your children about money and put them on the right track.
This is the perfect way to teach young children about money. Help them create three jars with labels stating Give, Save and Spend on each. Whenever your child receives cash, let them divide it equally into each jar. The Give jar should be used for donations or fundraisers—for example, it could be dipped into when your child’s school needs funds, or if they need help buying a gift for someone else. The Save jar is your child’s first savings account, and the Spend jar will be your child’s free money for the month. Watch as your child learns the joy of giving, while balancing the need to save and the want to spend.
Play the Stock Market Game
This is a great game to play with preteens or teenagers. Offer to spend $100 on any stock of their choice and help them research stocks and learn the ins and outs of the market. After you make the stock purchase with your child, continue to watch and discuss the stock as it earns (or loses) money. They’ll be able to learn about investments and new ways of handling money.
Match Your Child’s Savings
When it comes time for your teenager to save up enough money to buy that used car, give them incentive to continue saving by matching their earnings to reach their goal. Use this procedure as an opening to discuss companies which offer matching 401k plans. Help them learn how this kind of matching will work with any business they might work for in the future and how to think about goals for retirement.
Play Money Skill Games
There are multiple websites out there that offer online games which teach financial responsibility. Also don’t discount the old-school Monopoly-type games as well, when it comes to teaching your child the value of a dollar.
Set a Budget
When summer is almost over, and it’s time to purchase school clothes once again, set a budget and hand over the financial reins to your child. Let them learn how to handle the responsibility of choosing wisely in regard to their clothing, and school supplies. Controlled spending is often the best way to learn about cash as well as responsibility.
Open a Savings Account Together
Take your child to your bank and open a savings account together. This will impress upon your child the importance of their account, as well as the necessity to save. Let your child keep the ledger and record all debits and deposits.
Teaching kids about money doesn’t need to be a difficult task. Try a few of the techniques listed above and watch your child’s financial education grow.