Raising Money-Conscious Kids
“Mommy can I buy a toy?” or “Can you get me this?”
Do these words sound familiar to you?
My four-year-old believes that every time we head into a store, he can have whatever he wants. When I tell him that we don’t have extra money or that I bought him a toy yesterday, he has a complete meltdown.
In today’s society, it’s harder than ever to teach children the value of a dollar. Our culture suggests that it’s ok to overextend yourself and shop with credit cards that have outrageous interests rates and monthly payments.
That’s why it’s so important to give our children a head start and teach them about the importance of a dollar. While my boys are young, I’m going to start the conversation and teach them about money in the simplest terms possible. My goal is to give them the tools they need to make intelligent money decisions as they grow up.
Here are a few ways to begin the process…
1. Start the Conversation
I started to talk with my oldest about what money is, how it works, and why it’s important. While we are shopping, I explain how much items cost and why we can or can’t buy certain things. This constantly reinforces that everything has a cost associated with it. Over time, I’m hopeful he will grasp the concept and have a better understanding of the value of money.
2. Teach the Basics of Money
There are four main areas of money that children need to learn: working, saving, spending, and giving.
Earning Money {Working}
We’ve all heard the statement, “Money doesn’t grow on trees,” yet I think most children believe it does. I explained to my boys about where money comes from and that when you work, you get paid…..when you don’t work, you don’t get paid. Obviously they’re a bit young, but when they do their tasks {for example, cleaning up their toy rooms or bringing their dinner dishes to the sink} they “get paid” or rewarded.
Using a Piggy Bank {Saving}
When my older son finds something he really wants, we help him “save” for it. Like many young kids, he loves putting coins into his piggy bank. Every so often we will take the money out, count it and then help him figure out how much more he needs to save for that special item on his list.
Spending
When my son has enough money in his piggy bank for his special item, we take him shopping. Spending is his reward for earning the money and being disciplined in saving it. I’ve found that the toys he buys with his savings are his favorites. Saving the money himself helps build self-confidence, and he’s very proud to show everyone what he purchased with his savings.
Giving to Others
Teaching your children the value of giving is an important part of the money discussion. It’s wonderful to see young children get so happy to donate items {like their toys and clothes} and give to charities. It builds character and makes them less self-centered individuals. A few times a year, the boys help me go through their toys and put aside ones that they have outgrown. I explain that there are other children who are less fortunate, and it would make them very happy to have a few new toys. The other day, my son unexpectedly came to me and said, “Mom can you put this in the donation pile? I’m done playing with it, and I think another little boy would like it.”
3. Set a Good Example
My boys often mimic the things I do or repeat funny phrases that my hubby and I say. They’re always watching, observing and taking in what’s around them. That’s why it’s important to make good money decisions and explain to our children what we’re doing and why we’re making that decision. Our children are going to model the way we handle money – good or bad.