3 Lessons to Teach Your Kids About Money

Does your child understand the basics of money?

black kid putting money in piggy bankIt’s never too early to teach your children about money. In fact, whether you realize it or not, your children are learning about money from you. They understand that you go to the store to buy things, then check out with things that you want and need. The problem is that they don’t always understand how money works. Parents often attempt to teach children about money with allowances. An allowance is a start, but children can learn so much more from just a few inexpensive lessons.

Lesson One: Money is Not Free

It is very tempting to give children allowances, but this does not teach them that people work for money. Sure, they see people go to jobs, but they do not always grasp what this means. Instead of an allowance, create a chores list. Assign values to the chores and pay them for those chores once a week. Even small children can do small chores, such as feeding a dog or cat, dusting furniture, or even sorting laundry. The work will not be perfect, but your child will learn that money is earned.

Lesson Two: Save and Give

Once your child has earned enough money, create three piles: One for savings, one to spend, and the last to give to charity. Not only will your child learn how to sort money, he or she will learn not to spend all of his or her earned money. That habit will grow with your children and follow them into adulthood.

Lesson Three: Saving for What We Want

Have your child earn something that he or she really wants. It might be a new bike or a new Lego set. Set a goal with your child and offer your child extra jobs. This is a good lesson in saving and setting goals.

There are many other lessons to be learned, but these three are the first few lessons along the path to money management. The lessons are simple and fun, and you may even learn something from your child as you help him or her figure out the mysteries of money.

RELATED: Parent’s Guide to Raising Financially Responsible Children

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