10 Ways to Teach Your Children About Money

Some of you may wonder how I learned to be so frugal.  To me, most of the tips that I write about seem like second nature or common sense. 

My knack for thriftiness was given to me by my mother.  We were not wealthy growing up and my mom did the best that she could to make her dollars stretch.  She would constantly scrutinize the cost of items.  I learned as I watched her read sales papers, clip coupons, check price per unit, scope out clearance sales, and go back to the customer service desk for a refund on overcharged items. 

There have been many times in my life that I have been frugal out of necessity and there are times that I’m thrifty just because I can’t stand to spend more for something than I should. 

You’re obviously reading this site because you want to learn how to get the most for your dollars.  As parents, we also need to teach our children about money and finances so that they understand it’s value and do not become irresponsible overindulging spenders that have no money to their name and tons of debt.

Here are some tips for teaching your children about money:

1.  Take them to the grocery store.  Let them help you add up your totals and stay within your budget.

2.  Show them how you shop using the sales papers, making a grocery list, and clipping coupons in order to save.

3.  Give them a small allowance or afford them opportunities to earn a little money.  Even if it is only 50 cents a week, it will provide an learning experience.  (FYI: I believe that every child should contribute to the household.  I don’t think children should be paid for every little thing that they do, but I do agree with giving them opportunities to earn money.)

4.  Don’t buy them whatever they want.  Teach them to save for the things they want.  This will help avoid instant gratification problems with debt and will help them learn the value of saving.

5.  Let your child know that you can’t afford to buy everything.  Talk about how much the item costs.  Encourage your child to ask for extra jobs to earn the money.

6.  Talk with your child about every day expenses.  My daughter is 4-years-old and I have already began talking with her about the cost of water, electric, food, and our home.  She understands that it takes money to live.  Try to keep the conversation on the child’s level.

7.  Teach your children about the dangers of debt.  Personally, I think debt is pushed and marketed to us entirely too much.  When a student goes to college, there will be credit card companies with booths set up all around campus to help your child in case of an emergency to push your child into an ever so easy indulge now and pay later lifestyle.

8.  Discuss financial decisions with your child so that they have a better understanding of how things work and the importance of making the right decisions.  Discuss the pros and cons of making the decisions.

9.  Explain the bigger picture.  Explain that going on vacation doesn’t just require money for a hotel.  Explain the expenses of gas, food, entry fees, and any other expenses you may inquire.  If your child is old enough, perhaps you could have your child help you figure out how much the vacation will cost and develop a budget together.

10.  Teach your child to share with others that are less fortunate.  Our family has decided to sponsor a child in Haiti.  We have explained how poor the Haitian people are and my daughter wants to do extra chores to help earn money for them.  This will be a good learning experience for my children as they learn to help others and are appreciative of what they have.    

Do you have any tips to share?

image from sxc.hu