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Best Money Tips to Teach Your Kids

by on August 28, 2012

By Samantha Savory

If you had to learn the hard way about how to manage your money, make sure to not make the same mistake with your kids as your mom or dad did with you! Most personal finance experts will tell you to start teaching your kids about money at a young age. Even if it is basic small concepts, you can start at a preschool age and teach them how to earn, save and spend wisely. To help you better educate your little ones, here are some great money tips to incorporate into your personal finance lessons.

1. Start saving now – It is never too early to save! Teach your kids at a young age how important saving is. This way, they can take those traits into their adulthood and be financially successful independent individuals. Saving is a huge contributor to being broke and stressed about money versus financially secure.

2. Keep track of spending – Around age 10 through 12, you can start to encourage your kids to keep track of their spending on a simple piece of paper. When they get a little older, allow them to use a free budgeting tool on their iPod or computer to monitor how they spend and save money.Kids are more tech savvy than any other generation so it should be pretty simple for them to learn how manage their money online.

3. Never spend it all – This tip is especially important. No one should ever have zero dollars to their name. Explain how accidents or emergencies can happen and that it is important to always be prepared for the worst. Encourage saving with a piggy bank and then allow your kids to open their own savings account when they get into high school.

4. Know wants vs. needs – Food, shelter, clothes and transportation can be categorized as needs by most people. Anything else is categorized as a want and should only be purchased if extra discretionary money is available.  If your kids don’t have the money for a new toy or game, help them refocus on what is important and that they are fortunate and lucky to have everything that they do have.

5. Raise a savvy shopper – Always shop the discount stores and discount racks and instill in your kids to never pay full price for something. Teaching frugality can teach your kids to save a ton of money over their lifetime! Teach them about the various marketing and advertising schemes that are created to make them think they have to spend money on certain stuff. Educate them so they know they are more valuable than the latest sneakers or toy that they have. Also check out Common Sense Media – they have a lot of great information to help educate your kids from sneaky advertising tricks and scams.

6. Monitor the stock market – Some young teens particularly gravitate to this at a young age. Talk to your young kids about the stock market, how it works and encourage them to save their money to go towards one or two stocks they believe in because they use that product or service.

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From → Money Management

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