The Piggy Bank: Money Doesn’t Grow on Trees
When it comes to our kids, we certainly want them to have the best chance for a successful future so we work with them on their ABC’s and addition/subtraction, we enroll them in swim lessons and teach them to ride bikes, we encourage their artistic abilities with doodles and macaroni necklaces … but what about their financial well-being? For many families, finances are a mommy and daddy worry and the kids just don’t need to be involved. However, even at a young age, your kids can start to understand some overarching finance concepts that will certainly set the stage for their future financial wellbeing.
Where Money Comes From
We all know that money doesn’t grow on trees because if it did we’d all be farmers but do your kids know where it comes from? I can remember my son telling me that I could buy him a toy after I’d told him, no because we didn’t need to spend our money on toys right now. His response was, “all you have to do is go to the bank and ask them for money and they will just give it to you.” This provided a great opportunity to talk about earning money from working and how we only earn a certain amount so we must choose how we will use it. This brings us to the next thought…
Making Choices
Once your child understands that there is a limited amount of money that you have a conversation can be had about making good decisions on how to spend your money. If you choose to spend your money on going to see a movie, then you can’t spend it on getting a new toy. In my experience, it has been better to discuss this in terms that the kids can understand like I just did, comparing toys and movies. My husband has tried a couple times comparing, paying our electric bill instead of going to a water park; I could see our 5-year old’s eyes glaze over because in her innocent mind she won’t have to make that decision EVER. However, kids aren’t too young to understand that there needs to be a certain amount set aside for bills which brings us to…
Needs vs. Wants
By the time your children are heading off for school they should be able to understand that there are certain things (perhaps not fun things) that cost money such as a house or rent payment, gas for your car, clothes and things of that nature. If you take the time to explain to them that all of this needs to get paid before you can spend money on some of those other things that are just “wants” then you are helping place them in a healthy spending mindset for the future!