Start simple: Needs versus wants
Kids, and many adults, have a hard time deciphering what is a NEED and what is a WANT when it comes to spending money. Taking time and letting your child make lists of needs and wants is a great first step to familiarize them with responsible spending. Explaining we need food, we want Playstation games and the difference that makes on prioritizing spending is a good introductory lesson.
How I wish I would have learned this lesson before I was old enough to get a credit card.
Teach them to budget
Teaching your child to make and keep a budget is a great way to get started. We began by having our daughter make a grocery list and budget accordingly. Having her weigh in on what to buy, showing her how to shop sales and use coupons has taught her a lot about how money works.
We have a weekly grocery challenge, if our daughter comes in under budget at the grocery store she gets to keep the difference. This has worked amazingly well and also stops her from wanting to impulse buy because she feels invested in saving so she can reap the benefits.
Give them money to manage
Teaching money management means giving them something to manage. Whether you give them an allowance or give your child opportunities to earn chore money finding ways for them to manage money is imperative.
They have to have their own money and be allowed to spend it accordingly so they can learn what to do and what not to do with their finances. Allowing them the freedom to make some mistakes while the stakes are low is so important. We began simple with three jars on our daughter’s dresser labeled “Spend,” “Save” and “Give.” Each week when she is paid her allowance she has to distribute it how she sees fit to all three jars. Saving and giving can be hard concepts for a child but it’s a lesson that will pay dividends in the future.
Have fun with money games
The Game of Life and Monopoly are both fun ways to teach your children how to spend, save and budget. Both games allow kids to play out real life money management scenarios with no actual risk.
Interested in more ideas? The Ohio department of education has a tremendous list of financial literacy resources for all ages of children.
GEM CITY FAMILY
Pamela Chandler is a local mom who writes the Gem City Family column for the Dayton Daily News. Reach out to her at thechandlercrew3@gmail.com.
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