We’re sure you know how important it is to teach your children basic money skills. There’s no argument there. But, the problem comes when you have to figure out how to do it. Talking money doesn’t come naturally to most of us, and it is nothing like making a PB&J or riding a bike.
Research indicates that no one influences a child’s behavior more than their parent, so even if you feel uninformed yourself, you need to suck it up and pass on at least the basics of money management to your kid.
To help you out, here are a couple of well-researched, conceptually easy ways to teach money management.
Pay It Forward
We’re starting with the most important one – learning to give back. What most parents fail to do is teach their kids about being charitable. If they can understand it at a young age, best believe it’ll become an integral part of their adult personality.
You can start by explaining the importance of giving and how their deeds can make a big impact on someone’s life. Start with asking them to save quarters – and then a matching offer. Something like, for every quarter they save, you contribute the same as well. Then look up organizations that accept small donations for bigger things. Or, look around your neighborhood – who needs your help?
Cake All the Way
What could be more motivational for kids (and even adults) than a dessert? This activity helps teach skills that would be valuable to kids later in life, such as how to draw up and follow a budget. Step one is visiting your local bakery and asking the price of a cake (be sure to pick out your kid’s favorite flavor).
Here’s the challenge then: can they bake the same item for less? Grab a recipe, list of ingredients, and head to the nearest grocery store. If your items cost less than the bakery price, it’s time to get baking. If not, you need to do some comparison shopping until you come at or under the bakery price.
Perhaps Benjamin Franklin’s sentence was cut short back in the day – a penny saved is more than a penny earned, as long as you remember to stick it in an account that accumulates interest over time.
Talk about how letting interest grow on your savings is like free money and teach with example. To start the activity, give your kid a penny. After this, double whatever amount they’ve come up to each day in the name of interest. Now if you don’t want to lose some serious money, it’d be okay to stop on day 11.
Parenting is hard but a few tips here and there can really make your life easy. At the end of the day, you’re responsible for your child’s well-being. And what parent wouldn’t want their kid to grow up to be money smart?