Teaching Children Money

How to Teach Money Lessons Early For the Win

Editor’s Note: Hi everyone! Please welcome our new staff writer, Shanah Bell. Shanah will be sharing her story and advice on the blog twice/month. We thought she’d made a great second voice on the blog in addition to Laurie’s. Enjoy!

Teaching children about money, and the power that it truly has to make or break your life, is one of the hardest parts of parenting. As a family of 5, with the age ranges of our children vastly different, that gets even more difficult to navigate. How we need to teach the 5 year old is completely different than the way we can teach the 12 year old.

talk about it

Our children know that everything costs money. They know this because we talk about it in front of them. We have a budget meeting every week to go over what we spent that week and where we are falling short of our goals. The next day we usually mention to the kids how that went.

It is fantastic that they want to get involved and help out with the family budget. But they only want to do this because they hear us talking about money and our budget and we include them. Giving children information is giving them power and making them feel like they are part of a bigger system. After all, children soak in what you tell them and what they see you do.

In this instance, they see us talk about money and how it affects us all. This cues them to realize that this is a big deal. On the same side of the coin, we have tried to instill in them that our family unit is a team. Everything that one member of the team does, in turn impacts the team as a whole. This line of thinking drives them to jump in and want to get involved in the money aspect of how we live. This is a great first step to teaching them about just how much money impacts our daily lives.

visual examples

Children can be very visual when it comes to how they learn best. Take for example, when a child begins to count past 10 in kindergarten and they are using things such as buttons, pretzels or candy. The same method applies to teaching children about money at home.

The best example that we have come up with to teach them about money is at the grocery store. That may sound silly, but it has really worked. We do teach them these lessons slightly differently though, based on age.

Younger Children

The youngest children we keep with us and have them find things on the list. We ask them to find the cheapest version and then we discuss whether or not that is the best product in the category for us, by looking at the ingredients.

For the first few times at the store, this was extremely time consuming. However, after the kids had realized which brands we were favoring and why, they immediately started gravitating towards those only. Therefore, it is only long and drawn out initially. But, as with everything else in life, putting the work into the front end, nets a better return on the back end.

Older Children

Since the older children have been doing this a bit longer, they are on a different level. They are looking at the brand of food, the nutritional values, the ingredients and the cost comparison. They know whether an ingredient is something that can energize our bodies or suck the energy right out of us, so they are looking for that aspect also.

I love that they know this and are using it to price compare. The logic behind this step is that everything we put into our bodies affects our costs in the future. The healthier our bodies are, the less medical costs we potentially incur. Not only that, but we have the potential for a much better quality of life. All of that translates to money saved in the long run. So in reality, we are teaching them how to think about their future selves also. Which we think is pretty cool!

make Money actionable

Once children understand that money is what keeps our family in the current lifestyle we have, they begin to have a drive to make some of their own. We give our kids money in exchange for household chores. But these chores are outside the scope of the normal “chores” that they have to do as a part of the family team.

We are now to the point where they are asking for things to do to earn money because they are looking out for their future selves. On top of that, we have savings accounts opened up for each one of them. This is to prevent the money from burning a hole in their pocket. We have found that when they put it in savings, then they aren’t as tempted to spend it.

Overall, children are just smaller versions of us, as adults. So they will inherently have similar behaviors as we do with money. It is easier for most of us to just put our money away into savings and/or retirement accounts and not touch it, if it is automated. So we just automate the process for the children and put it directly into their savings, thereby bypassing the temptation.

These are just some tips and tricks that we have used to get our children more on board with money and finances. And so far, it seems to be working.

 

10 comments

  1. Brian says:

    Welcome to the blog Shanah! Being a dad of three teenagers, I couldn’t agree more. Involvement is the key. We include our children our budget discussion too. Having them understand overall income and expense helps them understand the decisions mom and dad make. I love your grocery store example, sounds like a game of scavenger hunt.

    • Shanah Bell says:

      Thank you, Brian! I love the grocery store example as well because it is something highly relatable for children to grasp and something that we, as adults, have to do regularly. Plus, these little lessons can ultimately help out with the household budget if we are teaching our children well. I call that a bonus!

  2. Talking about money is a great way to de-stigmatize it and teach your children about it. I wish my parents would have let me sit in on their money planning sessions because it would have really opened my eyes as a kid. I definitely plan on letting our kids in on our budget meetings so they can start to understand money management.

    • Shanah Bell says:

      I agree, wholeheartedly! My parents included me in some of their financial discussions but not nearly enough, in my mind. So as a parent, I decided that I would do my best to include them in all things financial so that they have more information and can learn from my mistakes.

  3. I talk up savings with my daughter quite a bit, and she has jars for savings and charity as well as her spending money. Right now, she’s a month away from saving the money she needs for a laptop (She has to pay for half. The one she wants is $350).

    I could never have done that at her age, but I don’t know that I wanted anything as badly as she wants that laptop.

    I get your point about automating savings, but I don’t think I’ll use it. My daughter has jars for savings and charitable giving, and some of the money she gets for allowance has to go in each jar. (she has a minimum amount that has to go in, sometimes she puts more.) I’m trying to drive home the “Save for the future” and “we can help people who need it with money” lessons as a choice she needs to make (her savings account is “to help pay for college.”) I fear if I automate that, the lessons won’t stick.

    • Shanah Bell says:

      Emily, I actually really love the jar idea! I tried that with my two kids and it just didn’t take. I think that children are like the rest of us in that they all have different learning styles, so I have tried to be adaptable to that. For us, I have found that if they don’t have it where they can reach it then it is less tempting. I, personally, love the jar idea for myself though and am glad that it is working for your daughter!

    • Shanah Bell says:

      Thank you, Laurie!!! I agree that it is very important to keep the dialogue open with children as they learn from us, as adults. We are certainly doing my best to create the best lives for our children as we can, from a financial perspective.

  4. Congrats on the new partnership you two!

    We talk a lot about how we’d want to raise our children, including how we’d want them to think about money, and work, especially if we end up retiring early. There’s some anxiety, definitely, about not having our kids see the work and time put in to save and invest. Might they see this as a good thing to work towards? Or, as many of us do, just take the situation for granted?

  5. Josh says:

    Welcome to the team Shanah! Having a two year old and a 6 month old, we still have a few moons before we talk turkey.

    I like visual examples. For better or worse, our 6 month old watches every move our toddler makes.
    Maybe she’ll take the hint and maybe not having so many temper tantrums in a couple years 😉

    We want to teach our children “why “ we do what we do in every aspect of life. In addition to the what and how do they can be well-rounded adults and children.

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