When a child becomes an adult their financial habits don’t come from nowhere. Financial habits are formed from an early age, as young as 7 according to research. This makes educating your child about money while they’re still young extremely important. Thankfully, it can be easy and fun to teach your kids about finances. This is what we'll discuss today, however, this article won't be written by me (Merle), but has been written by Jen Watson. Jen is a financial and real estate writer who loves breaking down complex topics into simple terms. She is a content marketing specialist with Siege Media and has worked with clients like Quicken Loans, EquityNet, Homebuyer, and more. And she's written this article for Money on the Mind, to dive deeper into the topic of teaching kids about personal finance, with some immediate applications. So here is Jen telling you about three different things you can do to better prepare your child for their financial future.
Spend, save and give jars
One of the best ways to teach your kids about money and responsibility is through spending, saving and giving jars. All you have to do is give your child three different jars, one for spending, one for saving, and one for giving. Whenever you give your child any money, such as an allowance, divide it up among the three jars.
Let your kid spend the money in the spending jar on whatever they choose (within reason, of course). Money that is left in the savings jar is being saved to buy something more expensive, and the giving jar lets your child give the money back to a cause that they care about.
Using these three jars will teach children how to be responsible and budget their money. Remember to use clear jars so that your kids can see their savings grow!
Take them grocery shopping
The grocery store is one of the best places for your kids to learn about money. Walk them through your purchases, tell them why you decided to buy one item or another. Show them the prices of what you’re buying and what you’re looking for in each product.
It could also be useful to teach them about the price differences between different stores. The goal is to get them as acquainted with grocery shopping and the reasoning behind certain decisions as possible.
At the end of the shopping trip, go over the receipt together and take a tally of everything you bought. What did you spend the most money on? Are there certain items that are more important than others and should be emphasized?
Show them how to make money
A lot of kids just don’t know where money comes from. They may have a vague idea, like that their parents go to work and get paid for it, but it’s likely that they don’t have a strong grasp on the concept. Here are a few things you can do to help teach your kids how the world works and how to make money:
Play Monopoly or other games: Monopoly or another game that’s based on money can be a great way to teach your kids about finances. Just make sure they’re following the rules or they may end up learning the wrong lesson.
Pay them for chores: If you’re giving your kids an allowance without making them work for it, they may get the idea that money is free. Show them what it’s like to actually earn their money by giving them chores to do.
Start a lemonade stand: Starting a lemonade stand may seem cliche, but your kids can learn a lot from operating one. Running a business is difficult, and so can a lemonade stand be for kids! Teach them the ins and outs of running a business by helping them start up their own.
Teaching your kids about finance doesn’t have to be hard. The steps above are a great place to start. If you’re looking for more materials to use, we’ve paired up with Quicken Loans to bring you these printable flash cards that will make teaching your kids real estate vocabulary easy!