If there’s ONE thing I’ve NEVER heard in my years of accounting, it’s this: I sure hope my kids grow up to be irresponsible with money and financially illiterate.
Right? Nobody WANTS their kids to grow up and struggle with money! Heck, even if YOU have struggled with money your whole life, I would be willing to bet that you want your kids to be able to do BETTER with money management than you have.
However, the fact of the matter is, unless we, as parents, TEACH our kids about money management (or any other thing, for that matter), they either won’t learn it at all or they will have to learn it the hard way later.
And yes, while your 5 year old isn’t making his own car insurance payments at the moment, the truth is, setting the stage for financially responsible teenagers and young adults really CAN start with teaching them as young children.
Here are 7 tips to start teaching your young kids about money management to set the stage for financially savvy young adults and adults.
1. Talk About Your Family Values Surrounding Money
There are a couple of scriptures that we feel are very important to use here.
First: “The LOVE of money is the root of all evil” (I Timothy 6:10).
This is honestly a very often misquoted verse. More than one, we’ve heard people say that “money is the root of all evil,” but scripture says that the LOVE of money is the root of all evil. That, friends, is a HUGE difference.
Money is a TOOL. Just like a brick can be used to build a beautiful building or break into and vandalize one, money is a tool. How and why we use it is extremely important.
Second: “Without a vision, the people perish.” (Proverbs 29:18)
Or another translation says: “throw off all restraint.”
If we, as stewards of our resources (in every area, not just financially), don’t have a vision for WHY we are saving instead of spending, or WHY we are choosing to buy a used car instead of a brand new car, then it will be harder (or impossible) to resist the overspending urge.
Develop your vision for your family finances. Write it down and talk about it with your kids. Depending on their ages, you may share more or fewer specifics, but regardless, they need to “see” the bigger-picture vision with you.
2. Talk About Why You Give Money Away and Donate to the Organizations That You Do.
Not to pull the “there are starving children in Africa who would love your dinner” card, but there’s a LOT to be said for teaching your children that generosity is a CORE value in your family.
And use this opportunity to remind your children Who is the giver of the resources that we have as a family.
3. Teach About Prices and Value
This really is a fun one to teach. A higher price doesn’t necessarily mean “expensive” when you teach from the perspective of value.
Conversely, a low or free price tag doesn’t necessarily make something a good deal. Now, trying to communicate this to a 6 year old at a yard sale… may take some creativity.
If you explain purchases and prices in respect to VALUE, not just price tags early on, this makes it a lot easier.
4. Teach Them That Making Money Is the Result of Adding Value
Sometimes kids come up with some really crazy “business” ideas to sell things that… well… only their mother would love. And while we’re all for creativity over here, the truth is, we aren’t going to get paid to breathe air or shred tiny pieces of paper and throw them on the kitchen floor in the real world.
Teach principles around what it looks like to solve problems in the marketplace or bridge a gap. Teach them about adding value around the home by pricing out jobs that they realistically have the ability to learn at their age.
5. Give Them Opportunities to Earn Money
When you have “jobs” for your kids around the house that they GET to do to earn money, that new toy bug slows down a bit.
If they know that they would have to vacuum the house three times and clean the bathroom sink 5 times to pay for that new toy, it makes them hit pause and really think about how badly they “need” the latest and greatest toy.
6. Give Them Opportunities to Spend Money
Even though we are proponents of saving money and socking it away for a rainy day, it is actually really good for kids to spend money.
It gives you the opportunity to teach them about pricing, taxes, making change, budgeting, and enjoying the fruits of their labor.
7. Visibly Track Family Financial Goals
Now, this is not to say that your children should be co-burden bearers of your financial struggles.
Please don’t do that. But if you have a fun house upgrade or a fun family vacation that you are saving up for, why not get the whole family involved!
Find a printable goal tracker or thermometer and make it FUN!
Teaching Young Kids About Money Management Is An Important Skill to Learn
Young kids are SO fun… and exhausting at times… that it can be easy to overlook or just plumb forget to teach them about finances, but don’t!
Financially responsible children have a leg up in the world over young adults who know NOTHING about budgeting and finances going into college.
It doesn’t have to be crazy hard or intimidating, just talk with them and teach them financial life skills like you do everything else!
