Teach Your Kids These 5 Money Management Skills

Now that the holidays are past us, it’s time to look ahead at 2016. Some of us make resolutions that don’t stick. Others set goals for the year. If you have children, an easy goal to set together is to teach them about handling money.

piggy bank

During the holidays, kids receive gifts and then the rest of the year, they expect their parents to buy them what they want at will. But now is a good time to teach your children how they can earn or buy the things they want for themselves. Here are a few ways to get the conversation started:

  • HOW TO BUDGET AND SAVE – If your children receive money for their birthdays or for doing their chores, don’t just let them spend it all immediately, teach them how to budget and save it. You can do this by having them split the money into two different piggy banks, one for saving and another for spending how they want. Before they go out and spend though their cash, teach them how to budget for the item they really want by finding out how much the item costs and saving up for it. This way they’ll see how much work it takes, rather than mommy or daddy pulling out their credit card and buying it for them.
  • TO SHARE – Parents make a big deal about children sharing their toys when they’re young, so why not start teaching your child how to be charitable with their money. Have them set a third piggy bank up and put money into it, then at the end of the month or year, donate it to the cause of their choice.
  • SET UP A BANK ACCOUNT – Once your child is older, go to the bank with him or her and set up a personal account in their name (with you as their co-sponsor). Have your son or daughter put money in every month, no matter what the amount. Make sure to show your child their bank statement every month.
  • SET FINANCIAL GOALS – My daughter, Katelyn, really had her heart set on a new doll. So in order to teach her about money, I had her set a goal of buying this item with her own money. But in order to buy it, she had to research how much it cost, determine when she wanted to buy it, and then save up enough of her money from chores to purchase it herself. Guess what? She did it and even found it on sale, so she got it for less. Now she appreciates that doll more than any of her other toys.
  • SHARE YOUR PROCESS FOR EXPENSES – Once your child is old enough, have your child sit down with you when you do your personal monthly expenses. He or she will see how much money it takes to feed, clothe, educate and entertain everyone in your household every month. Hopefully this will lead to a greater appreciation for the value of money.

Teaching your child about money is an easy resolution you can accomplish in 2016. Do it and you’ll see how much more your children appreciate not only money, but how hard mommy and daddy work to make it.

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