elementary aged kid holding a piggy bank and smiling

We’ve all heard the phrase “Kids are like sponges”. They pick up things we want them to and also some things we don’t! As a parent, what are the lessons you’re responsible for teaching them? Hygiene, how to cook, fill up a cup with water, throw a ball? The list goes on and on. As bankers, we’d be remiss if we didn’t give you tips for teaching them all about money! Now, thankfully, we don’t have to teach them about taxes or Roth IRAs just yet, so let’s start with the basic principles. 

Saving: In a jar? Or in a pig?

In my opinion, this is one of the easier ways to teach your little one about saving money. There’s no need to spend a lot of money on a piggy bank to start. Just grab an empty jar, bowl, cup, or basket you haven’t used in a while. Sit your kiddo down and ask them what toy or other item they really, really want. Then, tell them that they will save money they earn and/or receive if they want the item. All the money they get then goes into the jar until they have enough money saved up. A jar or clear cup is preferable because it shows them that their money is growing. One day they may only have 5 pennies, but the next they might have 5 pennies and 2-dollar bills in there! The younger your child, the bigger commotion you will want to make out of their jar filling up. You can start with really simple tasks at a minimal cost to get them used to earning money in exchange for work. Watching their savings grow will only get them more excited about saving!

Lead By Example

You know how in the introduction I said that kids are like sponges? Well, this is what I mean. If your kid sees that you impulse buy, go out to eat multiple times a week, or overspend frequently, they will have the same relationship with money. However, you can create a healthy and mature relationship with money by only buying necessities, going out to eat on special occasions, and sticking to a grocery list instead of buying whatever you see at the store. What you show your kids when they are young is most likely how they will perceive things when they are older, so be mindful of the example you are setting – even with the small things! Telling them they have to save up for a new toy car when you’re inclined to drop the newest best seller into the cart without a second thought doesn’t send a very consistent message.

Earn Your Keep?

We’ve touched on this earlier, under the savings topic, but one popular way to teach your kids about money, and more specifically that you have to work for it, is giving your child an allowance in exchange for doing chores. Now, like everything I tell you this is advice, not a rule book. The best part of this plan is that you can start early. They might be in elementary school or perhaps even younger. Give them a list of chores to do for the week that is age appropriate. Perhaps it’s take out the trash, do the dishes, or sweep the floors. But younger kids might need simpler tasks like pick up their room, a playroom or the living room. Keep in mind that young kids are not incapable of helping, but you may have to sacrifice time, or task perfection.

Once your child gets all his or her chores done for the week, and in a satisfactory way, you can give them an amount of money that you deem appropriate. It’s best if they know what to expect!

Oh, and the best part? This is a two for one special. You can teach your kids that money is earned, but it’s ALSO fewer chores that you have to do yourself! I mean that is why you have kids in the first place, right? At least that’s how my brother and I felt growing up! (Kidding, Dad.)

Practice Makes Perfect

Saving money goes hand in hand with budgeting. Budgeting might be a more complicated lesson to teach a very young child, but for older children, one way that you can do this is sit your kid down with you and make a grocery list. Tell them you have “x amount of money” that you can spend on groceries this week. Have them make the list of only the grocery items that you NEED and not want. Like eggs, milk, meat, and toothpaste. Then, at the store or online you can add these items to your cart and add up how much they cost to see if you’re within budget. If not, it’s a great time to discuss what you have to do to fall within budget. This is also an opportune time to teach them how to look for coupons and sales as well as discuss whether buying a different brand can help you save. It’s the little things that count!

These are four simple ideas to start to teach your little one about the value of money, saving, and good money habits. As they enter the teen years you may want to introduce topics such as opportunity costs, credit cards and good credit, as well as taxes. For now, just stick to the most important things…the basics! The good news is, it’s never too late to start! Tell us in the comments how you teach your kids about money!

Teaching Your Kiddos About Money
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