Teach Kids how to Manage Money

As a parent, it is your job to teach your children lifelong lessons and strategies to succeed in the "real world", and schools can only teach so much. Money management is obviously one of the most important components of adulthood, you use money to pay your rent, utilities and other bills. Unless children are taught otherwise, they may just grow up without the skills they need to be successful. Take an active part in your child's upbringing and teach them the value of a dollar. Here is a few ways how...

1. Where is it going?- Show your children exactly where money goes, whether that is on rent, utilities, groceries and entertainment explain to them that you earned this money, and if you spend it all, its gone. Try taking them through a budget worksheet like these great houshold budget examples from christianpf.com.
2. Don't scare them- Avoid phrases like "Do you know how hard I had to work to put a roof over your head, and food in your mouth". This scares children, and makes the topic of money scary and threatening.
3. Teach 'em early- As soon as children are learning how to count, introduce the concept of money. Children learn from observation and repetition.
4. Explain forms of payment- They may just think a credit card is a magic money card. Explain how credit and debit cards work, the benefits and drawbacks,and the consequences for abusing them.
5. Allowances- The best way to teach children the value of a dollar is firsthand. Try a weekly, or monthly allowance. Learn more from our article "Teach kids to manage money...with an allowance"
6. Take advantage of the school lunch- Most schools now allow you to have an account with money for school lunch. Give your child a set amount each week, and advise them to spend it wisely. Break it down, and show them how much they should be spending per day, but let them take it from there.
7. Use a piggy bank- This one may seem a little obvious, but it does work well. Have a piggy bank (preferably a self-counting one), and have your kids deposit loose change into it, and watch it add up.
8. Take them shopping- Make a point to bring children to the store with you. Teach them what you do while you shop (Price comparison, coupon clipping, looking at unit prices, etc)
9. Differentiate- Teach the difference between wants and needs, while tying money into it. Provide examples: We need money to buy groceries, but we want extra money to pay for cable.
10. Get key points across- Summarize statements with key points kids can remember. "A penny saved is a penny earned", "More comes from spending less" and so on.
11. Inspire a business attitude- Encourage kids to make their own money to learn how hard you have to work to have it. Have them participate in a garage sale, walk dogs, babysit or set up a lemonade stand. Don't discourage seemingly ridiculous ideas.
12. Part-time jobs- High-school aged kids and kids aged over 16 years of age are allowed to work part-time. Encourage this idea, and have them pay for some of their own expenses like gas, car insurance and eating out. Get the 101 on part time jobs for teens with our article Part time jobs for teenagers and students.
13. Goal setting- Remember, you can't reach a goal that you haven't set. Set goals both in and outside the realm of money, and help children identify  steps they need to take to reach goals.
14. Set up a bank account- Most banks have special accounts for children and teenagers, and they are a great way to teach kids about money. Study the transactions with them to point out exactly where money is going, and encourage a savings account.
15. Explain borrowing and interest- Introduce the concept of loans, borrowing and interest. Be sure to come equipped with real-life examples. (I.E. a $2,500 loan for a car will turn into a $5,000 loan with interest)
16. Encourage playtime- Children love roleplaying, whether it be house, school, work or anything in between. Encourage your little ones to "play store". Use real money, or toy money to show how transactions work in the real world.
17. Set an example- Actions speak louder than words. Demonstrate your money smarts to your children.
18. Be age appropriate.  Kids need different guidance at different ages.  Try this great series from moneyinstructor.com:
    

       Teaching Money Skills Information Classified by Grade Level:

    Pre-K through Kindergarten

    First Grade

    Second to Third Grade

    Fourth Grade

    Fifth to Sixth Grade

    Seventh to Eighth Grade

    Ninth to Tenth Grade

19. Try games that keep their attention, but also pass on valuable skills.  This list of kid's money games from the state of Washington is a great start.