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Ways to Teach Kids the Value of Money
When my kid were old enough to understand money and as they were learning about it in school, we took them to open their very own savings accounts. Did you know that it’s never too early to start teaching your kids the skills of saving and budgeting and other money basics? As parents, the sooner we start having regular conversations about money with our children, the more effective we will be in raising financially responsible adults. This is a huge goal for both my husband and myself.
Open a savings account with each child.
Taking each child to the bank has been one of the most memorable things to them so far. They loved opening their accounts and they love keeping track of them with the statements that come to the house each month.
Keep it real when it comes to spending.
When we go out to dinner, we break down the bill and say that “Dad or Mom had to work __ # of hours to pay for this.” We always let them know exactly how much something costs and what the value is to our family in terms of money and time.
Break it down when it comes to costs.
When each child wants to buy something, we ask them to think about why they want it and what will happen once they get it home.
Set a good example.
We have savings and money market accounts. We put money into them each month and we let our children know how much we are saving. Demonstrating good financial habits for parents is key to raising financially responsible adults.
Take advantage of the teachable moments.
Trips to the grocery store, attending a sporting event, getting money from the ATM, and planning family vacations are just a few examples of opportunities for parents to reinforce financial lessons.
As a parent, I feel that we need to talk to our kids almost daily about money matters. I really want my children to understand the value of a dollar and I am determined that they will grow up to be fiscally responsible. We don’t want finances to be taboo so our children are welcome to ask us anything at any time about our finances.
MONEY FACTS FROM T. ROWE PRICE
- 69% of parents discuss their financial mistakes to teach their kids about money
- 58% of parents let their kids make bad financial decisions so that they can learn from their own mistakes
- 52% of parents think kids should have their own credit card to learn about managing money
- 58% of parents with credit cards carry a balance at least occasionally
- 61% of kids think their parents worry about money
- 82% of parents say they set a good financial example for their kids, but 72% of parents have some reluctance about talking to their kids about financial matters
- 39% of parents say they have used money to bribe their kids
- 71% of parents say they have used money as an incentive for kids
- 22% of parents want their kids to be financially independent at age 18
- 85% of parents have expectation for what type of career their children will have, but only 41% of kids have expectation about their future job
- 85% of parents expect their kids to go to college and 53% of parents regularly save for their kids to go to college
JOIN THE TWITTER PARTY
Join us for the April 15 Twitter Chat at 8:00 pm EST for the chance to talk to Scholastic Parent & Child editors and a certified financial planner that specializes in education.
Disclosure: I have been asked by T. Rowe Price and Scholastic Parent & Child magazine to participate in this program.
Setting a good example is so important! I will definitely try my best to make it to the Twitter party!!
I should print this out and hand it to my kids.. they think they have $1 they can spend $2.. i am really trying to teach them how to save their money.
I think the most important lesson here is to teach by example. Your kids will learn the most by watching you.
These are all very good tips for teaching children the value of money and that it doesn’t grow on trees. Well, kinda. We give our kids such an important foundation when we teach them the ins and outs of handling money.
It’s so important to start teaching these things. They just don’t learn it in school!
These are great ways to teach kids the value of money. It is important for kids to develop a good sense for spending and saving.
Great tips. I’ve always taught my daughters the value of money. They’re only 4 and 6, but they know pretty well about it. We opened them up their own accounts when they were babies.
This is really smart to do for the kids, sounds like a great twitter party!
I’m so thankful that my mother taught me the value of a dollar at a young age. This has helped me avoid a lot pitfalls (i.e. credit card debt) over the years.
We opened a savings account for each kid, and made a really big deal out of it. My oldest likes to give me money to deposit.
You’ve mentioned good and valid points that parents should consider. Keeping it real when it comes to spending is something that I find very important. This teaches kids to live within their means – something that a lot of adults fail miserably and sadly, it’s one of the causes of living in debt.
These are some great ideas!! My son just turned four and has a piggy bank. He knows pretty much how the bank works and I was even thinking of setting up an account for him. I just wonder if it’s too early?
These tips are so important for any parent. It really does help if you teach them the right away.
Great post! I wish my parents had tought me better money skills when I was younger. My oldest son is 9, and takes after my husband, he loves saving money, and says he is saving up for his first car—he is well on his way, because when he gets money for birthdays or christmas, he spends a little and saves the rest.
Great tips. We thought our children how to save money early on. They each have their own life savings and they also have piggy banks at home.
This is great! It’s so important to teach kids about money and early. I will have to check this party out!
It’s so important to start early in teaching kids the value of money and saving. My little guy is only 2 but we’ve started explaining a little to him.
Love all of these tips. I started teaching kiddo at a really early age that she needed to earn money for this and she had to save for the bigger things she wanted. I think now at 10, she is pretty good at it.
What a fun twitter party! I will try to be there!
It’s so important for me to set a good example for my son when it comes to money. I really want him to be a saver.
Sounds like a great Twitter party! That is a nice message too to share with your children!
Hi Stacie – these are excellent tips – when I was in 5th grade – the school took us on a field trip (it was a private school) and we all opened a bank account – keep it real and break it down are good for all ages – and great share with the MONEY FACTS FROM T. ROWE PRICE
I’ve never thought to break down the expenses like that, but that is a cool idea. I have noticed that the kids are far less likely to want to spend money recklessly if it is their own though. 😉
Teaching kids the value of money so important. This will surely be a great Twitter Party. Thanks for sharing.
Compound interest! Teach your kids to start saving early and let interest do the work!
It’s so important to teach kiddos about money and how to be wise with it! I love a good Twitter party so I will definitely have to check this out!
The husband and I are trying our best to be good examples. Also, we’ve talked about opening a savings account for our son. We need to make that a priority.
Teaching children the value of money is so important! It is setting them up for a bright future, especially if you teach them how to MANAGE their money!
I hope one day when I have kids I will be able to share with them the mistakes I made with money when I was young and how they could take a different route. Lovely post, very important topic for parents and kids too
Awesome tips! We are trying to teach our daughter about money. So worth the time!