Kids today are living in a world where instant gratification is the norm. When children want something, it’s hard for them to understand not only why they can’t have it now but whether or not this item is a want or a need. It is important to instill in our children how to be money smart. We want our children to be financially independent so we can rest assure they can take care of themselves later on in life. To do this, we need to start teaching them money smarts at an early age. But remember, it’s never too late!
Teach them that money is earned. Chores are a great way to teach this. While there are some every day chores your child should have the reasonability of doing every day without monetary payment, you can have them do larger chores such as raking the leaves or helping clean out the garage to earn money. This is not only a great way to make sure they know they are part of team. Being part of a family means everyone has responsibilities to contribute to the good of the family. To earn money, they can do extra things around the house.
Show them how to save. It’s hard for children to not want to immediately spend the money that they have earned but it’s important to teach them how to save it. It shows them the pay off of accomplishing long term goals as well as learning how investing works. Set up three jars that will show them how to divide their money. These three jars are money you save, spend and give. Having clear jars helps your child visual see the growth. It is also an important lesson to learn how to give and be charitable.
Play the needs and wants sorting game. Kids have a hard time distinguishing between the things they want from the things they need. Have a few cards with items such as toys, candy, food , shelter and etc. Have them sort out the things that they need as oppose to what they want. This will help them learn what a need and what a want is, helping them think a bit more before making purchases.
Give them entrepreneurship skills. This is another great way to earn money for kids but also give them an understanding of the business world. Opening a lemonade stand is a great way for kids to make money but don’t forget to also teach them the cost of supplies and learning how much they really made after the cost of their expenses is taking out. Show them how to be creative with money as well as how to think of the benefits and loses of taking risks.