Teaching Your Kids Money Savviness
There are so many life lessons we want to teach our children when they are young, unfortunately, money savviness does not always make the list. But keep in mind, teaching your kids about money from an early age will set them up to be better money managers when they are adults—better at saving, less inclined to use credit cards, and knowledgeable about smart spending. Here are a few tips to start the conversation and educate your kids:
1. Give an Allowance. It is wise to give your children an allowance and teach them how to save as soon as they are able to conceptualize the value of money and how much dollars and monetary coins are worth. This will give them an early start in learning about spending wisely, and budgeting.
2. Consider a Savings Account. Setting up a savings account and a joint checking account can provide teachable moments about balancing accounts and the act of physically going to the bank to make a deposit into a savings account. This will help instill the long-term permanence of that habit.
3. Set a kid-friendly RRSP. Set up a RRSP plan where you match a percentage of however much your kids save at the end of each month. This will definitely encourage the kiddos to keep an eye on their spending!
4. Model Smart Money Practices. Your own choices with money can make a great impression on your kids. Clear your credit card debit and let your kids know how important this is. Look for deals whether it comes to back-to-school clothes or furniture. Have your children watch you price check to learn how it’s done. Practice menu planning for your family and let your kids know why you do it and how you save hundreds of dollars a year at the grocery store.
5. Use the Cash System. Many young people are sent credit cards the minute they leave the nest and head to college. It’s very tempting to get these cards and use them for things that don’t involve their education. It’s looked upon as “free money” unless they are taught differently. Make a point of using cash yourself and teaching them that it’s not wise to spend money you don’t have. If you can’t pay for it in cash, you probably shouldn’t be making the purchase.
6. Teach Them to Give Back at a Young Age. Start talking to your kids while they are young about the importance of giving back, both monetary donations and volunteering. Ask that they give up a small portion of their savings to give to their favorite charity. Make giving fun by setting up a lemonade stand with all proceeds going to help give to the needy. Volunteer together at the local soup kitchen or participate in a fundraiser at the neighborhood park.
7. Invest in a Modern Style Piggy Bank. Old piggy banks with one slit do not teach money management. Check out the Money Savvy Pig Bank which is clear and has slits for save, spend, donate, and invest. With the Money Savvy Pig, kids learn that money isn’t just for buying things.
8. Get Help From Technology. The Internet is full of age-appropriate money games for kids. For example, PNC Bank and Sesame Street teamed up to create fun videos and games that teach kids about money. This will teach kids about money in a fun way.
Parenting Expert and father of 7, Robert Nickell (aka Daddy Nickell) offers his “5 cents” worth of advice to expectant and new parents. Daddy Nickell is the founder of Daddy & Co., delivery room duds and daddy gifts and apparel for every stage of fatherhood, and the Daily Daddy Blog. He is also the creator and producer of “My Life as a Dad,” the groundbreaking new web series that showcases celebrity fathers offering their personal experiences and parenting tips.