5 Ways To Teach Your Kids To Be Smart About Money

by Karly Wood November 26, 2014

by Karly Wood 520 views

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3. Create Ways To Earn, Save, Spend And Share

Whether or not you believe kids should be paid for their chores, it’s important to give your child the opportunity to work hard and earn money. It’s wise to help kids divide the money they earn into 3 categories: save, spend, and share. By setting aside money to save, they will learn responsibility and patience. By spending, they will experience the rewards of hard work. And by sharing, they can feel the joys of helping others.

Karly Wood

Editor at Red Tricycle

I'm a born and bred Southern California native and currently the managing editor at Red Tri. I get to share my life with my husband of 13 years and our beautiful, 5-year old daughter. In my free time you'll catch me cheering for the Dodgers, cooking, baking, reading, crafting and probably watching a little HGTV!

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Budgeting Basics for Children

Teaching kids about budgeting is a fundamental step in helping them understand financial management. A good starting point is explaining the concept of spending money wisely and differentiating between wants and needs. You can introduce a simple budgeting system where they allocate their allowance or earnings towards savings, spending, and sharing, making the process clear and engaging.

By using real-life examples, such as planning for a small purchase like a toy or a game, children can practice creating a budget. It's also beneficial to discuss the importance of setting financial goals, whether short-term, like saving for a new bicycle, or long-term, such as contributing to a bigger purchase. This hands-on experience fosters a sense of responsibility and makes the learning process enjoyable.

Encouraging Saving Habits

Instilling saving habits in children can set them on a path to financial success in the future. One way to do this is by introducing them to concepts like savings accounts or jars for different savings goals. Encouraging them to save a portion of their allowance or earnings helps them appreciate the value of money and prepares them for future financial responsibilities.

Moreover, you can create challenges around saving to keep it interesting. For example, start a 30-day savings challenge where they aim to save a certain amount each day. This not only reinforces their saving habit but also teaches them patience and the satisfaction of watching their savings grow over time.

Teaching the Value of Sharing

Sharing should be an essential part of any financial education, as it teaches empathy and community involvement. Discuss with your child various ways they can share their money, such as donating to a charity or helping someone in need. This can be an enriching experience that emphasizes the importance of kindness and supporting others financially.

You can motivate your child to allocate a portion of their earnings to charitable causes. Engaging them in community service or fundraising events can also solidify this value and show them the impact of their generosity. It's crucial they understand that sharing is not just about money but also about time, effort, and love.

5 Ways To Teach Your Kids To Be Smart About Money

3. Create Ways To Earn, Save, Spend And Share

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