It’s never too early to start talking to your kids about money. When you teach them these lessons young, it helps them develop good savings habits as they grow up.
April is Financial Literacy Month, and to celebrate, we’re giving you some tips and resources for teaching your kids about personal finance.
Tips for teaching kids about money
1. Teach needs vs. wants
In the eyes of a child, wants and needs may be very similar if not the same. To help them understand the difference, sit down with them and have them write down a list of needs and a list of wants. Then, give them a budget of fake money and help them fit all the wants into the budget and decide which wants are most important.
2. Give your kids opportunities to earn money at home
You can let them earn money by doing tasks around the house outside of their normal chores. They could help cook dinner, fold a full load of laundry for the family or clean the living room. They could even earn a little money by helping a neighbor with tasks around their house or yard. This will help them understand the value of earning money.
3. Teach your kids about setting financial goals
When your kids want to buy something for themselves, walk them through the process of planning and saving up for it. Ask them how much money they have and then go over how they can earn the rest of it and how long it will take. Encourage them not to spend all their money at once and to consider future purchases as well. When they make smart financial decisions in pursuit of this goal, like not buying something less important, tell them they did a good job to reinforce their decision.
4. Open a bank account for your kids
Encourage them to put a portion of their money into their savings account every month. Let them see their balance so they can watch it grow over the years or see how close they are to buying something they want.
Set your kids up for the future
Talking to your kids about money when they are young helps them achieve successful financial futures as adults. Click the button below to see Penny’s Adventures content for your kids to learn more about personal finance.