Money is a touchy subject. No one seems to have enough, everything costs a fortune, and general cost of living is crazy these days. I’ve got two kids that I’m hoping to teach some good lessons when it comes to money. It’s hard though. Especially when they are younger – how much is too much or not enough? But it’s too important to skip. Start with these 5 things to teach kids about money to get them off on the right foot!
I remember getting my first set of checks. I know – I’m clearly dating myself here. But I was so proud. I went to the bank and opened my first account and ordered my checks. They were “Ziggy” checks. Is that cartoon thing still around even? Who knows? But, this was in the 90s. There weren’t a million credit cards and we certainly didn’t have debit cards then. You opened a checking account, called the bank’s automated number to see what had cleared and that’s how you knew how much money you had.
I didn’t know jack about money, but I knew I didn’t want to struggle with it forever. As a kid, I can remember my parents sitting around the dining table going over the bills and 99% of the time, there wasn’t enough money to go around for all the necessities. I also have memories of being a tiny kid at the grocery store and my mom having to decide what to put back because we didn’t have enough money to get it all.
So I’m determined that my kids learn about money and how to save it, use it, and what not to do with it.
5 Things To Teach Kids About Money
If You Don’t Have the Money, You Don’t Buy It
But I want it now! I want that $45,000 car and I need it. I need those $150 shoes. I’d love a new set of furniture to go with my new apartment.
Whatever it is. It doesn’t matter. If you can’t pay for it, you wait. Now, I’m not crazy. If you need medication, a doctor visit, or some other thing that impacts your health, that’s different. We aren’t talking about life or death situations. We’re talking about those things that are “wants”, not “needs”. Food and health are not in this category.
I want a new car. My car is old. Her paint is peeling and she’s pretty lacking on the luxury features. But guess what? She runs just fine (knock on wood), she gets me where I need to go, and I don’t have the cash for a new car yet. So until then, me and ole Debra (that’s my car’s name) will keep trucking along. Do I get jealous in the car rider line when I see that shiny new car? Yes. Of course. Is that jealousy worth going in debt over? Nope.
I learned this lesson the hard way. I’ve bought new cars. Brand spanking new off the lot. All the features and a giant price tag. And I’ll never do it again. Mistake, mistake, mistake. If you have a car that gets you where you need to go and you have any debt or not enough savings, then you don’t have the money for a new car.
So even though my kids aren’t even driving age yet, it still teaches them a good lesson when they see us paying cash for cars. And hopefully, they’ll understand that a brand new car when they turn 16 just isn’t gonna happen!
Saving Money Isn’t Optional
There is never a situation where you can look back and say, “gosh, I wish I hadn’t had the money saved for that”. Your refrigerator dies while you’re on vacation. Guess what? You have to replace it. With what though? Not a hope and a prayer, not a credit card. Money. You need savings for emergencies. Period. We work hard for our paychecks. I don’t want to give more of those paychecks away to interest on a credit card.
Car maintenance = money. Deductibles on your health insurance = money. Braces for your kid = money. Lose your job = no money. You need savings for all of these things and so much more.
And don’t feel hopeless if you have zero savings. It’s never, ever too late to start saving money. But just start. $20 a week x 52 weeks = $1040. Now I wouldn’t recommend taking 52 weeks to get $1000 savings, but if that’s all you’ve got, then do it!
Even little kids can grasp this concept. There’s no right or wrong way to teach them to save. Around here, my kids have jobs they have to do just because they live here, but also jobs they get paid for. It isn’t much. Right now it’s $5 each week. This is the way that works for us. Out of that $5 they earned for doing all their daily jobs, $1 has to go to giving, $2 goes to saving, and the other $2 is theirs to do whatever with. This isn’t saving for college or anything, but mainly if there’s a more expensive item they want, they need to continue saving their job money until they get the full amount.
And I know. $2 is a drop in the bucket compared to what things actually cost. But, for example, my daughter loves slime (what 8-year-old girl doesn’t these days!). If she sees a cool new slime at Target, she knows she needs to use her own money. Some of these may only be a few bucks so it won’t take her long at all to have the money.
This also teaches them that I don’t buy them something every time we set foot in Target or any other store. I make exceptions and sometimes choose to get them a little “happy” to surprise them, but very rarely do we ever have to have an argument in the store because they want something and I won’t buy it. It’s a non-issue and it makes shopping easier.
They just know. If they want it, they save and buy it.
You Have to Earn It
This idea of you have to earn it to spend it depends on the ages of your kids. If they’re 2, clearly this isn’t going to apply. But, mine are 11 and 8 so there are plenty of opportunities for learning about money. Money doesn’t grow on trees and there is no endless supply in our house. Work=money. If you work, you earn money.
This goes back to the weekly jobs my kids have. It’s nothing extreme. My kids aren’t spending all week cleaning the house from top to bottom, but they have small jobs that we rotate every so often and they get paid for them. Not everyone agrees with paying kids to help out and that’s ok too. But this is my way of teaching them that work=money=buying things you want.
We do this every night before bed. Or most every night. There are times that life gets in the way and that’s ok. But most nights, they check off their jobs and then they know they’re getting paid each week. This also helps us out too – we both work outside the home and it’s helpful to have everyone pitch in. I don’t get frustrated because I have to continually pick up after them and they see the benefit of working. Win-Win!
Currently, we’re teaching them a hard lesson about this. We’ve told the kids time and time again – “be careful with your iPad”. Don’t run with it, blah, blah, blah. Well, guess what? They were clowning around the other night and my daughter’s iPad hit the floor. And it’s pretty much dead. I don’t know if you’ve priced iPad’s lately, but they aren’t cheap. It sucks for her and I feel bad for her, but I’m not running out and buying her a new one this weekend. They’re both going to be responsible for part of the cost of either repairing or replacing it and until then, she doesn’t have an iPad. I’ll likely find some extra jobs she can do to earn more money than her weekly allowance, but she’s got to work for it and pitch in.
It’s OK to Make Mistakes But Learn From Them
Sometimes we don’t make the best decisions regarding money. See my statement above about cars. I made some really dumb mistakes buying two brand new cars in the past. But I learned that I never want to do that again. My Grandma told me they always paid themselves a “car payment” each month so that when the time came to replace a car, they had the cash on hand. So if I would’ve listened to my Grandma 20 years ago, I’d be much better off financially.
Do I want my kids to make such an expensive mistake like a new car? No, not at all. But I also want them to know that sometimes you mess up. And it’s ok. When they have their own money, it’s theirs to spend however they want. Of course, I’ll offer advice if necessary, but sometimes they have to learn on their own. Sometimes they spend their money on things that don’t exactly live up to the hype in their heads. And guess what? They remember that next time they’re shopping.
Or maybe they have their eye on something that they’re saving for. But instead, they decide to buy that $5 grab bag at the store. Now they’re 5 more dollars away from their goal.
Get Them Involved in the Budget
Now I certainly don’t mean that you need to involve your kids in all aspects of your finances. How much or little you share is a personal decision with each family. But if they see you actively attempting to save and spend money wisely, they’re more likely to follow in your footsteps. It can be as simple as the weekly grocery budget. It’s an area that concerns them (they like to eat), and you can show them how much it costs to feed a family. One day they’ll move out and be on their own. If they’ve never touched money or a budget, it’s going to be a harder lesson to learn at 18 than 8.
Some kids like a challenge. My son is this way. We’ve been really trying hard to save money on groceries. It’s an area of our budget that seems to just get out of hand. So we include them in the weekly meal plans and ask for input on ways we can save money either by using what we have or planning appropriately for the week. My son takes on some of this as a challenge. We bought their school snacks in bulk from Sam’s this month. I explained that they’d have to last for the entire month. He challenged me for longer than a month. We’ll see who wins that one!
Or it can be on a larger scale than food. Prime example – This past summer, my hours at work went from about 29 a week to 9. I lost 80 hours a month. And of course, it was summer – kids home all day and plenty of opportunities to go do fun stuff. After a few times of saying no, we can’t do that this time, or we don’t have the money right now, I figured it would be helpful if I showed them actual numbers. I told them what my paycheck was before and what it was after the cut in hours. Then it was crystal clear to them why we had to scale back.
I didn’t do it to make them feel bad. I wanted them to know they weren’t being punished and it wasn’t just that we didn’t want to do those things with them, but we just couldn’t at that time. We needed to trim some areas in the budget until I had more hours and they were perfectly fine with that. Yes, we were all a bit disappointed sometimes, but no one is scarred for life because we cut back.
Parenting is hard.
What to teach kids, when to involve them, and attempting to raise good humans. So when your kids are old enough, you can start introducing them to the concepts of saving and spending money. Give them a good foundation. Even if you’ve made mistakes – it’s ok. You don’t have to be a financial guru or be wealthy to teach them good lessons.
Use these 5 ways to teach kids about money to get them off to a good start!
- If You Don’t Have Money, You Don’t Buy It
- Saving Money Isn’t Optional
- You Have To Earn It
- It’s Ok To Make Mistakes But Learn From Them
- Get Them Involved In The Budget
Tell me some of the ways you involve your kids with money. What works, what doesn’t. Job ideas for 8-year-olds to earn money to replace iPads! I’d love to hear your suggestions – email me at firstname.lastname@example.org and share your ideas with me!
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