Raising Money-Smart Kids

Parents teach their children lessons in love and life, but too often, lessons in money fall by the wayside, even though most grown-ups would agree that understanding money is one of the most vital skills to real-world survival. Neglecting to impart financial wisdom on your kids can result in them becoming adults with little understanding of money management – and we all know the dire consequences that can come from that.

• Teach your children about budgets as soon as they know how to count. Obviously they won’t be able to grasp complicated concepts about balancing checkbooks and drafting expense spreadsheets, but they will still have a basic understanding of addition and subtraction that could make money management fun – and educational.
• Let them help you at the grocery store. If you use coupons, have them determine how much money will be saved. Or, tell them beforehand how much money you’d like to spend and have them help you determine if you’re staying within the budget or not.
• Teach children the difference between credit cards, checks and debits. Younger children especially may see you swiping a card and assume that all you need to spend is a piece of plastic. Make sure they understand how it really works.
• If your child asks for something they want, use that as an opportunity to talk about cost, spending and budgeting. Set goals together.
• If you give your child an allowance, encourage savings. For example: instead of handing over a $10 bill, give them a $5 bill and five ones, and have them deposit some of the singles into their savings account. Show them their statement each month so they can watch their money grow.