How to teach kids about money?

When children vent their frustration by being angry as in the situation described above, it’s no use to talk to them about money. Wait until they are quiet to explain them that they can’t have everything, that they have to make choices in life and that even yourself you can’t buy everything you want.  

Don’t be tempted to offer them the toy they want because you are afraid of disappointing them. You do a disservice to them and… to you because kids will want more and more. Even if they are free, simple actions like a kiss, a hug, time shared together or a word of love can bring as much happiness to your children.  

As they are influenced by their friends and daily exposed to ads like other children, your kids have many desires. Test them each time they want something. Ask them if they really need it and if yes, why. Can they live without it? Will they use it for a long time or get quickly enough of it?

There is no need to talk to your kids about your salary or the rent you pay for your home. Tell them instead that in life, you have to pay some things needed to stay healthy and to grow up and that, if there is any money left, then you can decide buying things to please yourself. Going to the bank or to the ATM to get some money is not enough; you have to work, save money earned and plan out your purchases. By showing them the way you draw up your budget and by stressing the need to save money before spending it, you show your kids the good example and encourage them to acquire good habits from the beginning. 

When you go shopping, take your kids with you and show them the price of items. And, for smaller purchases, make them pay and take themselves the change back. By doing this way, they will understand more easily the value of money. 

And for this, nothing is better than a piggy bank. Even if having a piggy bank may seem outdated in the digital age, it still has an educational value. It teaches kids the value of each coin and the way the small amounts can add up over the years. Thereafter, by opening a savings accounts for your children, they will understand that the money saved is placed in a secure location.  

To motivate kids, keep it simple and try to find entertaining ways to teach them about money. Show them with games that when they manage their money wisely, they will be able to make their money work. To start them saving, tell your kids to put all the coins less than € 1 in a clear jar instead of a piggy bank so they can see their money growing. Once the jar is full, they can decide freely what to do with the money.

Even making a budget can be funny with a little imagination. Ask them, for example, to find a job (in any newspaper with the corresponding salary) and an apartment or a house. Then they have to note all their expenses needed to live (power, internet, food, furniture, entertainment, etc.) and to calculate the difference between income and expenses.

By following these advices, you will help your children developing good habits for the future. Once they become adults, they will have the best chance of having a healthy relationship with money. 

03/20