For many kids, their first opportunity to learn about money comes when the Tooth Fairy makes her first visit and leaves a small payment under the pillow. This experience could be turned into a lesson about managing money, which is something most parents believe they should be teaching their kids. But it’s not happening. Check out these findings from a survey of 2,000 parents conducted by DoughMain:
...an overwhelming 81 percent of parents feel it is their responsibility to teach their kids about money and savings, yet only 63 percent of parents stated their children had a savings account, and only 27 percent actually indicated that they take their children into a physical bank to make an account transaction at least once a month.
Especially for Christian parents who know that stewardship is a theme that runs throughout Scripture, instilling solid money habits in your children is essential. And these are lessons children want to learn, especially older ones. Another survey revealed that 55 percent of teens want to know more about how to manage their money, particularly about complex subjects such as investing, budgeting, and financing for big-ticket items like a car or a home.
You can make learning about money fun for your kids. Here are three simple ideas to get you started.
What Is Money?
We live in a largely cashless society, but for children, especially those in preschool and elementary grades, it’s easier to understand money when they can see and touch it. To start teaching them, use cash and coins to teach them to count and show them how money is exchanged when they buy something.
How Do People Make Money?
As children begin to understand how money is used, they often wonder how to make it. For younger ones, explain that you earn money when you leave in the morning to go to work. In exchange for spending time at a job, you earn a paycheck (money), which you use to pay for things your family needs.
With your older children, introduce them to the concept of entrepreneurship. Explain that some people open restaurants, stores or online businesses to make money. You can give them a taste of this experience by helping them set up a neighborhood lemonade stand, sell handmade goods online or tutor fellow students.
Before your kids venture out for their own employment, start them off with an allowance. Even preschoolers can earn incentives for helping around the house. The goal is to teach them the relationship between work and money. The lesson is in developing an appreciation for the value of money, not the size of the allowance.
How Much Do Things Cost?
Linking your kids’ “work” to the expense of things they want to buy can drive home the lesson of how much things cost. If children spend an hour cleaning up their room to earn a dollar, spending that dollar on a soda at a fast-food restaurant might not seem like a wise choice.
As you teach this lesson, you can begin to talk about the concept of living within a budget, a life skill that 60 percent of American adults say they haven’t mastered (2016 Financial Literacy Survey). Teach your children to live within their means and you’ll give them a better opportunity to have a financially secure future.
One final lesson. Your children are never too young to start learning to manage money. ECCU Start Young Accounts are designed for just that - helping kids of any age learn to spend, save and give responsibly.