Teaching kids about money is more important than ever in our world of online banking and credit card purchases! I have written before about teaching kids money management; here are five everyday ways we teach our children about money.
Discuss Everyday Expenses
It is easy for kids to forget that so many things we use every day cost money. When our power bill comes, I show the kids how it is calculated, and we talk about what things in the house use up power. We talk about why some things are expensive while others are not – supply and demand, fair wages for workers, the cost of materials, the construction process, and other details. We go through a similar process when we go grocery shopping.
Let them Practice Controlling a Budget
Giving kids a budget for back to school shopping is a great way to teach kids about controlling a budget! My kids also learn to control their budgets by practicing prioritizing wants and needs using money that they earn folding and putting away laundry for me. When we travel, I give my kids a budget for lunch or dinner and they help me pick out food to eat. I am in charge of balancing our household budget, and I sometimes go over it with the kids as well so they can see where the money comes from and where it goes.
I highly recommend including some sort of charitable giving in budgeting exercises – you can pick out a few cans or boxes of food to donate to your local food pantry while you are at the grocery store (tip: bonus points for picking out things that are easy to cook and easy to open), and school supplies to donate to a school drive or local homeless shelter. When we balance our family budget, we always set aside a portion of our income for charitable giving, and the kids have some say in where that money goes. My kids also set aside a portion of all the money they earn for charitable giving. Thinking of others is a great way to help all of us – adults as well as children – balance out wants and needs – and it feels great to make a difference!
Let them Handle Physical Money
Virtual money is hard for even adults to control. Seeing and feeling real money is a great way to make kids more aware of how much they are spending. You can also use coins to teach kids about history. If you have coins from other countries, they are a great way to teach your kids about the world!
Use Pretend Play
Buying, selling, and using money in other ways in pretend play is a great way for kids to practice using money in a safe environment! My kids are always making little shops and designing their own currency. They learn a lot about saving and spending this way!
Talk About Money Mistakes
Kids LOVE hearing about mistakes parents make, and since they tend to remember these stories pretty well they make for excellent teaching opportunities! I have spoken with my kids about things I would have done differently – from paying down student debt very aggressively only to borrow money at a higher interest rate for a home repair (the importance of maintaining a decent savings cushion) to buyer’s remorse.
How are you teaching your kids about money?
This post is part of the Cool Maths for Cool Kids for my friend Helen of Peakle Pie. Kids learn a lot about math (maths for my UK readers) as they negotiate budgets, practice adding new income to a balance, and decide how much to save, how much to give, and how much to spend. You can link up any math activities you have to the linky below!