Money management is a difficult skill to learn and use, even for adults. In “The Disappearing Allowance,” Anne learned a hard lesson about what happens when you don’t save your money. It’s best to start with your kids when they are young, so those money lessons stick with them as they grow up. We pick our 3 best tips on teaching kids about money.
- Start with a Piggy Bank
By getting your child a piggy bank, it’ll help them collect spare change, or have a place for an allowance, should you choose to give them one. Seeing the money pile up over time will show your kids visually how when saved, even the smallest amounts, money can in fact add up.
You can even take it to the next level by depositing their piggy bank savings into the bank. Each time, show them the growing balance to hammer home how money saved, steadily grows.
- Give an Allowance
One of the hardest parts of money management can often be how to spend it. With so many options out there, especially for kids these days, you may have your child asking for just about everything. Getting allowance (however small) will put the decision in your child’s hands. Do they save or do they spend?
Allocate their money in categories: to spend, to save, and to give. By spending their own money, children learn the value of money, and how finite it can be, pretty quickly. Divying up their allowance into categories will show them money isn’t to be spent on just wants.
- Stress the Importance of Delayed Gratification
People, not just children, are guilty of wanting to buy what they want, when they want it, regardless to whether or not they can afford it. Challenge your child to think of something they really want. When they think of it, ask them to write down the price.
Tell them, in order to get it, they must save for it. Once they save up enough money one of two things will happen. They will realize they no longer want it, or they will be glad they earned the money to get it.
Did we miss any money management tips? Sound off in the comments! You can revisit money management in Annetoon, with Vol 1-9 on DVD.