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Tips for Teaching Kids About Money Part 2 of 2

Apr 23, 2015

At PFCU we encourage you to help your children create strong financial habits beginning at a young age. Earlier this month we shared a blog post with five fun tips for teaching your child about the value of money. Although Financial Literacy Month has come to an end, it’s important to continue the conversations year-round about the importance of healthy financial habits. To help you do so, we’ve provided a few more tips below on ways to teach kids about money.

Let Your Kids Tag Along

Kids love to ask questions. Next time you plan a trip to the bank, consider bringing your children with you so they can see you making transactions and can ask why you’re doing so. Allowing them to watch what you are doing and explaining to them what they are seeing helps them understand the importance of such tasks as depositing money into your savings, withdrawing money in order to pay with cash or transferring cash between a different account.

Emphasize Value and Equality

It can be hard for some children to understand why their mom and dad buy less things or go on fewer vacations than some of their friends. Experts say it is important to volunteer or consider donating old toys or gently used clothing to help teach kids that not everyone has the same opportunities, and to help them feel fortunate for what they do have. Every family has a different financial situation and it is important for kids to understand why, and how to help those who may have less than them as well as why they may be receiving help themselves.

Invest in a Modern Piggy Bank

Saving money is great no matter how your child is doing it, but recently, piggy banks have received a positive makeover. The modern-day piggy bank, like the one shown below, is divided into different compartments to give kids a visual for how to allocate their money. These piggy banks make it easy for kids to visually understand not only how to distribute their money across multiple channels, but also how much they are putting toward each enterprise.

piggybank

Make a Game out of It

Board games like Monopoly, Life, and Payday all involve money and give children the opportunity to learn about buying and selling items, and the responsibilities that come along with it, using play money. The opportunity for them to hold the money and physically watch their savings get smaller from purchasing things or grow from adding to it is important to understanding the value of certain purchases and behaviors.

Reward Good Habits

From small things like a trip to the movies or something much bigger like a Disney Vacation, rewards can have a huge impact on a child’s commitment to saving. Making a goal chart for your children to save personally and/or for family savings, is a great way to teach them the value of putting money away. Once they reach their goal they can buy the toy they have had their eye on or see the movie they have been dying to watch. Larger rewards like family vacations are more for saving as a family and being able to track everyone’s progress as they aim to reach their financial goals over a longer period of time. Either way, it is important, and can be fun, to make a list of individual and family goals and track the savings progress each week.

By now you should have all the tools you need to get your kids thinking about the value of money. And remember, one of the quickest ways children learn is by mimicking their parents’ behaviors, so it’s important that you set a good example when it comes to practicing smart financial behaviors.

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