How to teach your kids about money – the simple way!
Learning financial responsibility at a young age is crucial. Your child should know how money works and how hard work is how you earn money. It doesn’t grow on trees and we need to be teaching our children that from very early on.
I feel like my parents did an excellent job teaching my sister and I all about money. It wasn’t handed to us, we didn’t earn it for making good grades (that was expected), and we learned how to budget out money.
I love my Baby and I’m sure he will be spoiled, but he will know how to work. I think teaching finances to children will help them know hard work is how you get ahead and that everything will not be handed to you in life.
Here’s my top tips for how to teach your kids about money:
Make them work for it.
Don’t just fork over an allowance each week. Setup chores for your kids to do to earn their money. I recommend having a standard set of chores to even qualify. For instance, their bed has to be made and their clothes put away each day before they can do an extra chores to earn money.
Don’t give them an option.
Chores shouldn’t be optional. The money is an added bonus, but because they live in your house and you provide their meals then they should be expected to pitch in.
Let them pick their chores.
Sit your kids down and ask what they want to help with. My sister and I volunteered for our paying gigs so we felt like we wanted to do them. It will help your kids take ownership in their tasks.
I had a friend with young kids tell me this story once years ago and it has stuck with me. His little girl started fighting with him on drinking her morning milk. So instead of fighting back or getting frustrated he came up with a plan. He set out 3 cups each morning and her job was to pick the cup she wanted her milk in. She had taken ownership over making that decision and she would happily drink her milk from her cup of choice.
Let you kids decide what they want to do and they will take pride in getting it done.
Pay per chore.
Set a price for each task and that’s how they get paid. It’s not a set amount each week, but they have a maximum amount they can earn. Now I know each amount may differ between families. 25 cents per chore may work for some while others may give more, but no matter the amount you decide – you need to set a price and stick with it.
For instance, taking the trash to the street is worth 50 cents and bringing the empty cans back is another 50 cents. Emptying the dishwasher is worth $1.00 and so on. If they skip a day or a week then they do not get compensated for it.
Teach them how to budget.
I like the idea of having a set amount that goes into savings each week. You can make it a specific dollar amount or percentage. I prefer percentage because it also teaches them math each week. You can set what you think is reasonable, but they know before they can spend any of their earnings a certain portion must be put aside.
10% is a good amount to start with in my opinion. It’s a round number so doing the math can be easy. You can have 10% for savings and 10% for tithing to teach your children about charity.
By treating the savings and tithing as a bill they are learning how to budget their money before spending which can really help them understand how expenses work.
Just a few simple steps can really help teach your kids about money. It doesn’t have to take hours each week, just a few minutes every Sunday and your kids are getting a budgeting lesson. I love the idea of passing on the work ethic my parents instilled in me to our son.