How to Talk Money With Kids
Posted on: November 16, 2017
Studies have shown that children who are taught financial concepts at a young age become more financially responsible as adults. Unfortunately, teaching financial lessons can be difficult, especially for the little ones. Read below for four tips that will help you explain the importance of managing money effectively.
4 TIPS TO DISCUSS MONEY WITH KIDS
- Spending. Helping your child understand that most things aren’t free will benefit them greatly in the long run. Children who learn at a young age the value of items will learn to appreciate what they are given, rather than expecting it. They will better understand why you say no, and have a greater appreciation for the things you say yes to. One of the best ways a child can learn the value of a dollar is to teach them to earn money.
- Earning. Earning money is the best way to show children that money, in fact, does not grow on trees. Learning the concept of where money comes from is critical for smart spending. There are many great ways that young children can begin earning money such as allowance for chores, running a lemonade stand or contributing to a garage sale. These examples teach children that you have to work to have money.
- Saving. Once a child has grasped the concept of working for money, it is good to start teaching them how to save their money. Spending your money all in one place, or on things that aren’t a priority is a bad habit that can be prevented. Leading by example is a great start, but there are creative ways to teach the self-discipline that saving money requires. Two ideas for saving include a jar system, which is great for visual learners. For older children, you can consider opening an actual savings account for them that they can build upon throughout their life.
- Necessity vs. Luxury. Along with learning to save money is learning to prioritize your spending by needs and wants. This can be a difficult concept for kids to grasp. It is helpful to create a list with your child on the things you need to survive – food, shelter, clothing etc. Then create a list of things they have but could live without – games, toys, candy etc. You can even create a pie chart to allocate needs and wants visually. Illustrating this lesson can help your child grasp the difference.
WHEN MONEY GETS TIGHT
Despite our best intentions, sometimes money gets a little tighter than we’d like. If you have an unexpected expense – a car repair or a trip to the ER, for example – and are having trouble making your budget work until next pay day, come visit one of our 59 locations today. We offer a number of financing options, including cash advances and auto title loans to help you get by in a pinch.