Teaching kids about money
One of my earliest lessons about money was when I was around 10 years old. I often helped my mother to go shopping. We went between the grocery store, local butcher shop, produce market, and Asian food store looking for special deals. It was my early recollection of store branded items, which were much cheaper than other branded products that had more fancy packaging. I observed how my mom managed a tight weekly budget and was amazed to see how the items - which at the time added up to $150 or less – happily fed a large family for the week.
As a working mother today, I found myself thinking about how to teach my kids about money. Starting at a young age of around 5 years old, I motivated my kids to save by giving them a “piggy bank” or jar and dividing out any loose change of coins or one-dollar notes from my purse. When the piggy bank or jar was full, we would roll the coins up in those brown coin wrappers and take it to the bank cashier to deposit in their own savings account. They received a receipt showing their balance. Admittedly, I doubled the value of their deposit - which in normal life does not happen - but has been a good way to incentivize them to refill that piggy bank time and time again.
In trying to teach her daughter about money, my sister took a Spend, Save, Share approach. She bought three digital counting jars and asked her daughter to set a dollar goal for each. When she earned or received money, her daughter had a choice of which jar(s) to put or split the money into. This approach is an ingenious way to instill a value of generosity and giving to others.
A common approach that many parents use is to have their children earn money for completing a chore around the house. In return, they receive an allowance to save or spend on what they want. This offers another opportunity to teach kids about money, encouraging a good portion of the earnings to be saved, setting goals, and how to prioritize spending.
Teaching kids to be enterprising is another way to learn about money. Last summer, my teenager and his friend started a lemonade stand. Of course, seed money for the ingredients was borrowed from me. Excitedly they sold around 80 cups that afternoon. However, they learned that after giving some of the revenues to younger brothers and friends who “helped” at the stand, their remaining share as lemonade entrepreneurs was modest. It was a good learning experience and they had fun doing it, nevertheless.
Whether it is a trip with you to do grocery shopping, a piggy bank, chore money or lemonade stand, there are many valuable lessons that parents can share with kids about earning and managing money.
Books can be helpful resources for parents to teach kids about money. Below is a selection I would recommend for kids from 4 years old to early teenagers. Each have different styles and valuable lessons such as prioritizing needs and wants, making good choices, sharing and borrowing, generosity by helping others, savings and investing, and entrepreneurship. The kids will enjoy these books and some of the saving jars with plenty of kid appeal!
Books
Sam and the Lucky Money by Karen Chinn. Readers 5 to 8 years.
A Bike Like Sergio's by Maribeth Boelts. Readers 5 to 8 years.
The Rag Coat by Lauren Mills. Readers 7 to 10 years.
Money Ninja: A Children's Book About Saving, Investing, and Donating (Ninja Life Hacks) by Mary Nhin. Readers 5 to 10 years.
Kidpreneurs: Young Entrepreneurs With Big Ideas! By Adam Toren and Mathew Toren. Readers 10 to 14 years.
“Piggy banks”
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Photo of boy by Africa Studio | Shutterstock.