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Teaching your kids about money

Over the summer, my daughter and her friends came up with an idea for a bracelet stand where they sold the elastic and bead jewelry they made to people in a local park.

I was feeling pretty proud of my little entrepreneur as she counted her earnings on the walk home, that is, until we heard the ice cream truck.

Less than five minutes after she and her friends divvied up their hard-earned cash, my daughter was eating her share of the profit in the form of a rocket pop.

Of course, spending money before it even makes it into the piggy bank is a fun experience that every child should have, but it got me thinking that perhaps we should chat with our seven-year-old about the value of saving.

Although money can be a touchy subject for some, teaching your children about it doesn’t have to be complicated and it can be one of the most beneficial pieces of wisdom you pass on.

Here are eight tips to help teach your kids the value of a dollar:

 

 

  • Allow your child to earn 

 

Not every family agrees with the concept of an allowance or what chores/tasks children should do to earn one but giving your child an opportunity to work for their money may be the most important thing you can do to help them learn. As soon as they are old enough to understand that people use money to buy things they want, encourage them to keep their money in a safe place until they have enough to buy what they want.

 

 

  • Provide opportunities for extra income

 

Going hand-in-hand with a regular allowance is the opportunity to occasionally allow your child to earn more money for extra chores. This is a win-win because it allows you to get out of some of your least favorite tasks and your child may even start coming to you with ideas of how they can earn more.

 

 

  • Lead by example

 

As with everything in life, children will do what you do, not what you say so make sure you are using your money wisely. You can let your child in on your household budgeting process to help them see how paying for expenses works. Let your child see you planning your budget, paying bills, shopping carefully, and planning major expenditures. You can even set a family goal, such as saving for a vacation.

 

 

  • Help them be a smart shopper

 

Help your children make the most of their money by teaching them how to comparison shop. Assist them in making sure that the toy they want is the best decision and then how to check the price, quality and reviews of the item in different stores or websites. Once again, it is crucial that you lead by example and think twice before running out to get the gadget on your wish list if it is not in the budget.

 

 

  • Emphasize the importance of giving

 

Now that they have some money of their own, it may be time to introduce your child to the fact that not all people are as fortunate. Talk about those who are less fortunate than yourselves and brainstorm how you can help. Maybe they can give money directly to a charity of their choice or set aside some funds to buy food for the local food bank. Make sure you allow them to choose who they give to.

 

 

  • Take a hands-on approach

 

Let your children see and count their money as often as they want to. This may mean dumping out their piggy bank and stacking teetering piles of coins for younger children, or helping older kids navigate online banking. It can help to see their hard work pay off and know they are getting closer to their goal. It may also be beneficial for some kids to split the money up into spending, saving and giving portions so they know exactly what the funds are earmarked for.

 

 

  • Let them plan

 

A great way to help your children learn about budgeting is for them to completely financially plan a family activity on their own. A trip to the movies is a perfect opportunity for them to budget for. Ask them to:

  • determine the price for tickets for each member.
  • add in extra costs such as parking, drinks, treats or food.
  • discuss ways to save money such as eating before you go or finding an online discount.
  • add everything together to determine the total cost. 

 

 

  • Make it fun

 

Money can be a very serious thing, but it can also be fun. There are plenty of exciting and interesting ways that you can demonstrate the value of money through play. Set up a shop and take turns being the customer and the shop owner. Play board games that involve the exchange of money like Monopoly, LIFE and Pay Day. There are even kid-friendly apps that teach about money, banking, investing and budgeting.

 

We all want our children to grow up to be financially responsible adults. Leading by example is always one of the most important aspects of teaching our children anything and with a few additional tips, rules and practice, they can learn healthy spending and saving habits that will allow them to thrive in the years to come.

 

Stacie is the editorial assistant of Calgary's Child Magazine and mother to a delightful daughter and silly son.

 

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