Teaching kids about money is challenging. Most children have a hard time understanding the value of money until they start earning it.
If they’re too young to earn, a weekly allowance can go a long way in teaching them the value of money, of saving towards a bigger purchase and of comparing prices and making wise buying decisions.
Even if your kids are very young – too young to get an allowance – or if you prefer not to give them an allowance, you can teach them to delay gratification and avoid impulse purchases by encouraging them to start a wish list.
Whenever your kids see something they want and ask you to buy it for them, add it to a wish list. Once a week, or once a month, go over the list together and see if they still want the item. Often, your kids won’t even remember what was the toy that they wanted so badly just a week ago.
When teaching kids about money, it’s always a good idea to talk with your children about how much things cost. Most young kids are completely unaware of the cost of things, because their parents buy things for them and they never actually pay for anything. When I walk down a drugstore aisle with my daughter and she asks for a particular item, we pick the item up and look at the price. To get her to understand what the price means, I say something like “with this, you could buy 3 candies” or “wow, $5 is really expensive for Chapstick – how about this one, it only costs $3.”
It’s not necessarily easy for me to teach my kids about money and about saving money, because I am not that great at delaying gratification. But this is one of the best things about parenting: the need to teach my kids and model good behavior helps steer me in the right direction too.
When I teach my kids about money, I am teaching myself as well.
Photo by Daniel Y. Go