Parents aim for their kids to be better or smarter than them in everything they do.  One area that can get forgotten though is financial literacy and money management.  Can they make smart money decisions, balance their accounts, and not overspend? This is not taught in schools!

We need to help them learn financial skills before they leave home. Don’t be afraid to teach them, even if you’ve struggled with managing your own finances. Sometimes sharing our struggles and even bad decisions can be the best way to start a conversation.  Here are some basic topics and discussions you should have if you’re wondering how to teach kids about money.

Teaching Kids Money Management

Every family has different goals and values, but money affects all of us. Depending on the ages of your kids, choose which of these issues are relevant right now.

Let them practice using money

Some families do allowances and some don’t. While this isn’t where I’m going to go into all the different thoughts behind an allowance, I do think there’s value in your kids having money to use so they can make mistakes and learn. Whether you tie an allowance to chores or not, it’s important for them to have some money at their discretion from a young age.

Teach spending / saving / giving

When your kids start acquiring money, whether it’s through an allowance or odd jobs, teach them to divide their money into three categories: spending, saving, and giving. The percentages are up to you, but we usually start with our kids having them put 10% in giving and 10% in saving. As they get older, we increase the percentage that goes into saving. Of course, they can always add more to saving or giving if they want, but those are the minimums.

For younger kids, it’s great to use cash and keep it visual. You can buy an expensive piggy bank with dividers, but if you’re giving your kids an allowance, just have three separate containers. We always use Mason jars since they’re see through.

Talk about money as a family

Did you grow up hearing that it wasn’t polite to talk about money? Well, it may not be polite to ask someone how much money they make, but in your own home, you have to talk about money. You don’t have to tell your kids every detail, but they need to understand how money works into the life of an adult.

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