I remember when my teen was little. She was about 2 or 3 when we started having conversations about money. Some of the conversations were not easy especially when they happened in a store. I knew there had to be a better way and there was. I had to get smart about how to teach my girl about money.
Children do not understand simple money concepts until we teach them. They learn about money from those around them. A little one does not understand that by working we earn our income. A little one does not understand credit, loans or even giving. These are all concepts that must be taught.
Simple money concepts can be taught to even little ones.
So how do we teach our kids about about money?
1. Start conversations early.
Even children under 5 can understand simple money concepts. Take your children shopping, talk about what you are doing. One of the first concepts I taught my daughter was that not every shopping meant a treat. She learned that on Saturday’s she could get 1 treat.
2. Allowances teach many financial concepts.
When you hand your child an allowance you are giving them the ability to make choices. With an allowance you can teach them about budgeting, making smart choices, saving, and even loans.
Trying to figure out when to start giving an allowance? My suggestion, start when they start school. Most parent’s give an allowance which equals every year of a child’s life. Once you start giving an allowance stick to it, and set a schedule. My teen has gotten an allowance since she was 6. She is now 18. We started small at $2 a week and now she is at $20 a week.
As she grew we talked about budgeting, spending and even giving. My teen often saves for larger purchases, she saves for college and gives some to her favourite causes.
She earns other money besides her allowance by doing work. She has helped neighbours and found a after school job this year taking care of a fellow student.
3. Opening a bank account
Having your child go to the bank with you while you bank and having them open their own account is important. Your child will learn how savings accounts work. The savings account can be used to save for a bigger purchase and college. It is important that children be taught about deposits and taking money out of the account for a purchase. It keeps them engaged in the money process.
4. Use tools to teach your kids about money.
One of my favourite tools right now is a series of books by Teresa Cascioli. The series is called M is for Money. The books are geared for children age 5 to 9.
The series has 9 books, and follows the adventures of twins Tessa and Benji as they learn about Canadian currency, budgeting, visiting a bank, saving, taking out a loan, making money choices and charity. The twins even run a lemonade stand in book two, which gets kids thinking about business. That is a good thing in my books. In book 9, kids are taught that giving is great, which is a great in my mind as well.
Most kids are spenders, I know my daughter was till I really started teaching her about money concepts. I think the books are a great way to introduce kids to basic concepts and from reading them through they will be easy for most kids. As for reading, they are written more at a grade 2 and above level but make for a great book to read together so you can discuss the money concepts. I always think when it comes to money mom and dad talking it and showing it in daily actions makes for a great saver some day. With the series there are teaching guides which helps when it comes to having those important financial literacy conversations.
I encourage you to check out misformoney.ca when you can buy the books, download free match and coloring games, reward certificates and more.
For the #CDNmoney chat on Tuesday, March 22nd at 7pm EST we are talking about how to teach kids about money with Teresa, the author of the M is for money series. She is also giving away 3 prizes packs (some of the books from the series and a few goodies). Hope you can join us for the conversation.
Need to know how to follow a twitter chat? Read my post here.