One of the most important gifts you can pass along to your kids is the knowledge of money: understanding what money is, how it’s used and how to save it. With the advancement of technology, kids are being exposed to ideas and possibilities we never thought could exist. If you want a product, you can avoid the old fashioned brick and mortar and purchase whatever you need directly online. The downside is, kids are not seeing the physical transaction of money. To avoid the idea that the ATM machine is a magic portal where money comes out on command, we must provide kids with an overall understanding of how money works. And with any subject, making it fun is all it takes:
Let’s start with the basics: The Piggy Bank.
If you haven’t already, set up some sort of awards system for weekly accomplishments, chorus, good grades, etc., in exchange for money. Let the search and find of the piggy bank be a lesson on why it’s important to have a saving and how it’s helpful. Once they find a piggy bank aid them in setting aside their earnings to save up for a shopping trip, or a fun day out.
Set up a chart that reflects the amount of money deposited at the starting point. Keep track of every amount deposited and withdrawn from the piggy bank. Sit down weekly with your child and set some savings goals that reflects their wants and activities they would like to spend their money on. The goal is for your child to understand the idea of money, so let them be fully responsible for their financial goals and achievements.
For a better understanding of money, pull out the monopoly money or any type of fake money you may have lying around the house. Use it to demonstrate the different denominations, such as $1.00, $5.00, $10.00 and $20.00. Also it is a good way to demonstrate how various combinations can be used to make larger amounts, such as how many $1.00’s it takes to make $20.00. Make a game out of this to better the understanding of money for your child.
Another fun idea is to take the kids with you to the grocery store and discuss what you are buying and why. Create a meal list for them with a set amount of money to spend. Let them witness first hand how much food cost to prepare a dinner for the family. Kids learn best from hands on experiences.
If you have more than one child create a game of “who can save the most” and reward the winner with more money for their Piggy Bank. Take the opportunity to discuss next levels and methods of savings, such as savings accounts, CD’s and college funds. And again, MAKE IT FUN!