Kids can learn a lot of things in a classroom environment, but some of the most important lessons that kids learn about life are learned from their parents. For example, the importance of family and tradition and ethical behavior are most commonly learned from the parents and extended family. Of course, one of the most important but often overlooked lessons that kids learn from their parents involves money. From the basics of saving money and managing needs versus wants to investing and more, kids gain a tremendous amount of information about money by watching your own words and actions. While kids can learn through observation, you can also provide them with structured lessons too. Through structured lessons and plans, you, can more fully teach your kids about money management in a fun and beneficial way.
Working for Cash
As an adult, you may be one of the millions of people who feel that working for a living is a drag. However, kids need to learn that money doesn’t grow on trees and that they cannot simply extend an open hand and expect money to fall into their possession. Even young kids can begin working for cash by performing simple chores. You can establish a regular chore system with a weekly allowance, or you can take a freelancer’s approach to working and allow your kids to earn money by completing chores when they want to buy something specific. Of course, you should encourage kids to do chores even when they don’t want to buy something so that they can have cash on hand to spend when they do want something later.
Many kids do chores purely for the sake of earning money to make purchases. However, kids should also be taught the benefits of saving money and about delayed gratification regarding saving. As a parent, it is hard to show your kids the benefits of saving by stashing their money away in a savings account. To younger kids, it may simply seem as though you are taking their money away and hiding it. Younger kids can learn about savings through a bonus program. For example, you can tell your child that she will earn an extra dollar from you simply if she chooses to keep her money in her piggy bank for a full week or a full month rather than to spend it. At the end of that time, make her that same offer. She will see that saving money really can pay off.
Using Modern Technology
There are numerous ways that you can employ modern technology to teach kids about money. For example, there are savings apps designed to help kids track their savings and earnings. The Chore Piggy is just one of many apps that you can choose to use. There are also video games and online games designed to teach kids about money. For example, at OrangeKids.com, kids can play a space-themed video game that allows them to work at different jobs to fuel their space travels to other planets. Another option to consider involves teaching older kids about the stock market by opening up a custodial account. Through this account, kids can contribute money into it and make their own stock picks. This should, of course, be done with your guidance. Through this process, they can learn about stock investments while also watching their money grow over time.
Kids will learn about money, spending, saving and investing by watching your actions and listening to your words. However, they will also learn about money through various structured educational methods. From giving your kids an allowance and allowing them to enjoy the benefits of their labors with cold, hard cash to playing money games and investing with their own money, there are many different steps that you can take to teach your kids about money. Consider putting some of these methods to use today.
Wayne Lee, a personal finance advisor and part-time blogger loves to learn and share tips on credit card offers and how to apply online. Click here to read more about his work.