The Piggy Bank: Top Teaching Tips
The last few weeks, we have focused on financial education of our children based on their ages. I thought it might be fun to take a look at some tips on teaching kids to save from the best bloggers in personal finance. The folks over at Peer Finance compiled a list of ideas and rules to raise “financial superstars” all ranging from understanding the value of money to how to budget. Please find this list below. Also, for more information from these folks, check out the sourced link at the end of this post.
- Help them with goals. Kids can have trouble seeing the long-term payoff from the immediate sacrifice of not spending now. Help them visualize their goal and get excited with them about meeting it.
- Raise the bar gradually. Don’t expect your kids to be financial mavens from day one. Start with small goals that pay off within a day or a week before working on longer-term goals. Start by saving a smaller percentage before building up to bigger savings.
- Set the example. I call our son ‘the little monkey’ because he repeats nearly everything he sees. More than just a curious mimicking, your kids look up to you and will adopt your habits. We grow up to be our parents, for better or worse.
- I think the biggest thing parents can do to help their children learn about money is keep them in the loop. We have honest dialogue about so many things, why not spending too? Talking about trade offs and compromises in spending choices is much more powerful than simply saying “no”.
- We learn by doing and our kids are no different. Many of the ideas had kids doing some kind of task or applying themselves to learn about money. This not only teaches kids that money is earned in the real world, it also helps them develop their own skills.
- Teach your child the connection between work and money. Don’t give them an allowance just for existing.
- My kids are still little (8, 6, and 4), but I think it’s important to start them young when it comes to managing finances. I’m a big fan of teaching them practical application of the things they need to know when they leave your home. Things that will help them stretch a dollar as they build their lives separate from yours without access to your money. Like how to figure out which item is a better buy in the grocery store, how to get gently used items for a good price or even how to meal plan so they aren’t constantly eating at restaurants. I think teaching them principles of saving should be coupled with a strong work ethic. I want my kids to be successful, but also able to hang onto their money. It’s a big job we have teaching them all the life skills they will need before they leave home – you can never teach them too much.
- Let your kids suffer a bit. We can be too quick to ease the financial pain our kids sometimes experience. If they don’t have the money to go out on Friday night because they spent it on something else or don’t have a job, then they shouldn’t go out on Friday night. The best thing my parents did for me as a teenager was make me work if I wanted to have spending money.
- Turn your bills over to your kids and pay them the savings they can generate from lowering them. Instead of you constantly trying to get them to do stuff, the roles will be reversed and your kids will be hounding you to turn off the lights in each room.
- The importance of credit and understanding the value of something. Not necessarily its cost, but its value. If you buy a $500 car and have to do $500 worth of repairs every month for 6 months versus buying a $2,000 car. Which is the better value?
Sources: https://peerfinance101.com/expert-ideas-teaching-kids-money-saving-tips/