Money Management Tips for Kids
As parents, we like to take care of our children and see that their needs are met. While it's our responsibility to provide food, shelter, and clothing for them in addition to the necessities, today's kids need their own money. However, to just "fork it over" deprives them of a tool they'll use through their whole life, the skill to manage their money effectively.
- Money games like Payday and Monopoly Junior are fun tools that help kids understand money.
- Start helping your child learn to manage money the first time he or she gets money. For instance, when they receive a large monetary birthday gift (or a bunch of small ones), don't keep it for them. Ask them what they'd like to purchase with their loot and help them to choose wisely. Encourage your child to save all or a part of gift money for special, more expensive purchases.
- Provide your child with a place to keep his/her money. A couple of good money carriers for kids are money belts and neck pouches to help prevent loss of a wallet or purse while shopping.
- There are lots of cute piggy banks available, but the best kinds are those that are transparent and let your kids see their money grow. Encourage your child to save change after a day of shopping or coins received from the tooth fairy. When the piggy bank is full, help your child count and sort the money. Then take your child to the bank and turn the change into bills or deposit part of it into a savings account.
- Start a passbook savings account for your child and help her track deposits, interest, and withdrawals.
- Go halfsies. When your child wants an expensive item, you'll teach him a lesson in value as well as how to save when you offer to pay half the purchase price. For instance, when my daughter was growing up, she wanted a pair of shoes that would have cost me a day's pay. I told her I wasn't going to stand on my feet for eight hours to put shoes on her feet, yet if she could save half, I'd pay for the other half. Not surprisingly, after a couple of weeks, she opted for a less expensive pair (and proudly paid half for them to boot!)
- Clip coupons with your children. Let them add a couple to their money pouch. Go over sale flyers and discuss value versus price with your kids. Help them understand when a bargain is a bargain and when it isn't.
- Let kids help make the grocery list and let them cross off items as you add them to your cart. Grocery shopping is also a good time to help kids learn to compare prices.
- An allowance is nearly a necessity for kids today, but make at least a part of it earned income. Cover your kids' necessities with a fixed income and have a jobs list for them to earn extra money by doing extra chores.
- Remember your child's money belongs to your child. Be supportive and with advice and encourage children to spend and save wisely, but allow your children to make final monetary decisions and pay the resulting consequences or reap the rewards of good money management.
Money Management Home ►