Strategies for Teaching Kids About Money

I clearly remember learning my “value of a dollar” lessons as a young girl from my grandfather. He lived through the Great Depression so who better on this earth to teach me than someone who was living day to day on what he earned? My grandfather’s lesson made a life-long impression on me for which I am extremely grateful. I would like to be able to do for my children what my grandfather did for me.

My daughter has been blessed to never be in need of anything. She does not understand what life is like for people in need of clothing, food, school supplies, or a warm bead. This has made me think a great deal about strategies that parents can use at home when it comes to teaching kids about money.

Children have often heard the expression “money does not grow on trees.” We need to work to earn the money we spend. Assigning daily or weekly chores teaches children first-hand the connection between working and earning an allowance. Provide a piggy bank for them to physically place the money in and monitor how much they collect. If they have a bank account, you can take them to the bank to allow them the opportunity to deposit it themselves.

Consider making children responsible for paying for some of the things that they want. For example, if they want ice cream at school, maybe they should use their own dollar bill. If they want to buy a new toy, they need to save their money from doing chores to purchase it.

Include your children in the process of collecting household items and clothing to donate to others. Bring them with you to the local thrift shop and have them assist in unloading the car and bringing the items in to the store.

Use cash to pay for things as often as possible instead of using credit cards. Teaching the concept of “not spending money unless you have the cash to spend” is a precious lesson that many people wish that they learned earlier in life. If children watch adults simply hand over a credit card time and time again, they will be more likely to do this as well in the future.

Children learn by what they see and experience in their environment. It is so important for parents to be positive role models. If adults buy whatever their heart desires without careful consideration, their children will want to as well. Parents can teach their children by refraining from impulsive buying and explaining why they are not buying what they want (i.e. it is not a must-have, saving the money, etc.)

Teaching kids about money definitely involves more time and effort than giving a child whatever they want. However, the benefits cannot be denied. Your child will be a better person and will thank you in the future.

Kim is a guest blogger from Tidbits From A Mom. In exchange for sharing this content, the Allstate Community has compensated her via cash payment.