Introduction
Many money habits form by age seven, so it’s important to teach kids about money early.
Learning how to manage money is a skill that helps children avoid problems like falling behind on bills or having too much debt when they grow up. Starting young makes it easier for kids to develop good financial habits. Here are seven simple activities to help teach children about money.
1. Let Them Earn Their Allowance
Children learn the value of money better when they work for it. You can give your kids a weekly allowance for doing chores like cleaning their room or helping with dishes. This also helps them understand budgeting. Apps like BusyKid and Greenlight make it easy to assign tasks and transfer money to their accounts.
2. Encourage Part-Time Jobs
Older kids can earn money by doing small jobs. High school students could work part-time at a coffee shop or store for a few hours a week. Younger teens might earn money by mowing lawns, babysitting, or walking dogs. Websites like Nextdoor or neighborhood newsletters can help connect them with people who need help.
3. Share the Cost of Purchases
When your kids ask for expensive toys, games, or gadgets, ask them to contribute part of the cost. For example, if they want a new Lego set, let them save up and pay for half of it. This helps them understand that money is limited and things cost money.
4. Use Games to Teach Money Skills
Board games can make learning about money fun. For example:
- Payday: Teaches budgeting, handling expenses, and saving.
- Monopoly: Shows how to make smart investments and take risks.
These games help kids see the importance of saving and making good money choices.
5. Open a Bank Account
When your child outgrows their piggy bank, consider opening a savings account for them. A kids’ bank account teaches the value of saving money over time. Later, when they start earning money from a job, you can introduce more advanced ideas like saving for retirement or opening a Roth IRA.
Some services, like Greenlight and GoHenry, also offer debit cards for kids. These cards allow kids to spend their money online or in stores, while parents can monitor their purchases and set spending limits.
6. Teach Them About Investing
Investing is a key skill for long-term financial success. You can open a small custodial account for your child through a brokerage. Let them help decide how to invest the money. When they become adults, they’ll take full control of the account. This early experience helps them understand how to grow their money through stocks and bonds.
7. Talk Openly About Money
Be honest with your kids about your family’s finances. Explain how you create a budget, save money, and make decisions about spending. Even during tough times, like job loss, having these conversations teaches them how to handle financial challenges in the future.
When Do Kids Start Learning About Money?
Kids start learning basic money concepts as early as age three. By age seven, many of their lifelong money habits are already formed.
How Can You Teach Kids About Stocks?
You can teach kids about investing by opening a custodial account. You’ll manage the investments until they’re old enough to take over. This gives them hands-on experience with the risks and rewards of investing.
What Apps Can Help Kids Learn About Money?
Apps like Greenlight and GoHenry provide tools for kids to manage money. These apps include features like debit cards, chore tracking, and spending reports, which allow parents to guide their kids while giving them some independence.
Conclusion
Teaching kids about money early helps them become responsible adults. Whether it’s earning an allowance, opening a savings account, or learning how to invest, these activities prepare kids to make smart financial decisions in the future.
