April is Financial Literacy Month, and it’s never too early to start teaching your children the value of a dollar! Getting them to understand how to save money now can set them up for success later. Here are 6 ways to get the conversation started.
Money jars and allowances are tried-and-true ways of introducing your kids to the concept of money. Whenever your child completes a chore, put the agreed upon amount of money into the jar. Instead of giving them a flat rate at the end of the week for all the chores they did, put a price on each chore, with their earnings going up with the chore’s level of difficulty. That way, your child starts to learn the correlation between their time and effort with what they’re paid.
Taking your kids to the store with you is a great way to demonstrate smart buying decisions. When you reach for a more expensive item at the grocery store, explain to them how the item you’re buying may have more nutrients, contain larger servings, etc., and how that means you’re getting more for your money than another brand. Seeing the comparison in real life can make it easier for them to understand as opposed to learning this as an abstract concept.
Every kid points to a toy at the store and asks to take it home. While teaching financial literacy, tell your children they can get it if they contribute a certain amount of money to the purchase. This is to help your kids curb impulse buys and have them ask themselves if they really want it.
Saving is a bit of a strange concept to young children, and it takes time for them to see money accumulate. If anything, “saving money” can be seen from a child’s perspective as an excuse to not buy fun things. To fight this, here’s an exercise to try next time you’re at the store:
The idea is to show them more quickly how even the smallest of purchases influence your savings. It’s also a great way of showing them how they have a choice in how they use their money.
Saving money can feel like a punishment to kids. The pay-off isn’t fast enough or worth their while. Sit down with them and have an activity in mind to save for, like a trip to the zoo or their favorite restaurant. Show them the cost of the activity, along with how much money they have now, and come up with a game plan to get there. Offer ideas such as setting aside money from their allowance each week, slowing down on video game purchases, etc. to achieve that goal.