Welcome to Part 2 of this article on smart ways to teaching kids about money.
In Part 1, we talked about your need to become a good money role model, and the importance of using strategies to help your kids fight the influences of their peers and advertisers.
If you have started using these tips, good on you!
Let’s look at more savvy ways to teach your kids about money . . .
3. Send Kids the Right Money Messages
What we do has a huge influence on our kids. But we seldom think about the influence of our actions!
Do you regularly upgrade your stuff like buy the latest phone?
Do you make impulse buys at the mall or online?
Yet, do you often complain about the lack of money?
Cut back or stop what you’re doing. You’re harming your finances and your kids’ finances!
Remember, there are ears around you, listening.
What we say about money in our kids’ presence will influence their feelings and thinking towards money.
If we keep saying that it’s hard to have money, our kids believe us and think it’s hard to make and save more money. We don’t want that to happen.
Do you make negative comments about the rich?
If you remark that the rich are rich because they’re either lucky or have inherited wealth, your kids will think logically that luck doesn’t come often, and so it’s hard for ‘ordinary’ folks to become rich.
Your kids will also think they can’t become rich, since they won’t inherit millions.
Money messages parents need to send:
Take positive action like involving your family and kids in creating a sensible budget. Discuss new ways to save or earn more money.
Take actions to improve your finances. Help your kids to set their money goals. Set your own money goals. Agree on reasonable deadlines and celebrate when the money goals are reached.
When your kids see and hear your positive attitudes and actions about money, they will likewise adopt a can-do attitude about money and take concrete actions to reach their money goals.
4. Talk about money with your kids
Encourage your kids to talk about money.
It can be something as simple and interesting as how money came about. How money is better than the barter system.
This will set the scene that discussing money is normal. Being open about money means that you’re influencing them to be willing to discuss money matters with you and their siblings.
According to this CNN Money article, “with only 21% of parents regularly talking about money with their kids”, it clearly shows that more parents need to take an active role in teaching their kids about money.
Sadly my parents belong to the other 79%.
They’d never talked about the importance of saving money with me. Their money discussions were always kept out of my earshot.
As a result, I hardly saved in my younger days. I knew nothing about money management. Don’t let that happen to your kids!
Involve your kids in family financial discussions (when it’s age-appropriate). You could ask your kids for opinions about whether you should spend on a family holiday or spend on replacing an old family car.
Discuss and listen to what they have to say. Consider their viewpoints and explain why you agree or not agree.
It’s important to get kids to see the different sides of an argument and arrive at a sensible decision. This develops their analytical and critical thinking skills, and make them more money savvy.
Sometimes there are no right or wrong answers – a decision may depend on personal preferences.
My son believes in buying essential items rather than experiences. His reasoning is: once a holiday is over, there’s nothing tangible to show for it except snapshots.
But I disagree. Well, the consensus is that as long as he doesn’t have to pay for our family vacation, he’s not complaining. Hmm . . .
5. Play money board games with your kids and have FUN
Having fun playing money board games with your kids is a great family activity. They’re not just learning and having fun, they’re interacting with you. This is an awesome family activity that has so many benefits.
You may like to consider these money board games. They’re affordable and the value they bring far outweigh their small initial cost because your kids can play again and again.
(This post contains affiliate links. I may receive a small compensation if you purchase through these links. You do not pay any extra at all. Please read my disclosure policy. I only recommend products that I trust and have received positive reviews).
I made sure that they have at least 4.5 star customer rating. Click on their pictures to find out more.
This Dino-Opoly Monopoly Board Game set below has 4.5 customer rating.
Winning Moves Games Payday is a classic and encourages social interaction. This game is simple and quick.
And I just cannot not recommend the Monopoly Junior Board Game, the all-time family favorite!
6. Get Kids to Learn About Money by Doing
Kids (and adults) learn best by doing. Doing teaches them about real-world application.
If your kid wants a smartphone or some other gadget, it’s a good time to talk about a savings plan. Show her it’s possible to buy it using her own money, through saving up her allowance every week.
Or you might wish to match her savings, so that she’s able to reach her goal sooner.
Caution: matching savings need to be just occasional, to avoid the risk of kids feeling entitled to money support from you!
One concrete way for kids to visualize their savings progress is to give them money jars. They’ll be excited to see their coins adding up.
This is also great for applying some math skills too. For example, multiplication can be used to calculate the future money outcomes of a savings plan. This a good way for kids to understand how math can be applied to real life.
I know of someone whose child busked for pocket money to save up for a toy. Her mom advised her to save half the money earned. The rest of it was used to buy the toy.
7. Let Your Kids Make Some Money Decisions
Depending on your kids’ age and maturity level, give them some leeway in certain money decisions.
A reminder: The younger they are, the more guidance you’ll need to provide.
If your kid’s goal is to save up for a toy, let him/her have some control in the decision. Let them decide how much money they’d like to spend, provided they save a certain amount regularly.
Give them such opportunities to empower them – give them control over their money, which helps develop their reasoning skills and self-confidence.
8. What about Money Mistakes?
What if my kids make money mistakes, you may ask.
Well, mistakes are a good way for them to learn. Let your kids take the risk of making money mistakes.
But be sure to calmly discuss with them what happened, and ask them what they have learned from their money mistakes. This makes kids more money wise, and also make them stronger, as they learn from mistakes and learn to bounce back from setbacks.
I think parents shouldn’t replace any money that their kids lost through making wrong decisions.
Because we all learn best when we face the effects of our mistakes. Our kids need to experience the consequences, to become more careful with their money and possessions.
9. What about Allowances?
This really depends on your preferences.
Some families find that giving allowances for chores can motivate their kids, while others may choose not to adopt this system. There’s no right or wrong answer. You need to see what works best for your family.
According to this CNBC article, digital allowances apps can help kids better manage their money. It also shows the average weekly allowance by age if you want to go that way.
10. Why online educational money games can be useful
Some children prefer to learn about money concepts online. There’re now many free online math money games that are interactive. These educational games integrate both math and money concepts, so your kids are learning how to apply math to money.
We all need to set a positive example for our kids. We must educate them properly about the importance of money basics like saving, budgeting and spending wisely.
Set a good example. Discourage your kids from impulse spending by not making impulse purchases yourself!
Your kids may not thank you at first, but they’ll really thank you soon enough once they’ve realized the value of your money guidance!
Lay a solid foundation for your kids to develop into financially literate adults. This way, you empower their financial success and your financial success 🙂