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October

2012

Teaching Kids About Money

EDUCATION

teaching kids about money

Hello, Friend. How about a special treat since it is Friday and I bet you are all looking forward to a fabulous weekend. Two posts today, yeah! Have a great weekend.

How do you go about teaching kids about money? Not just “this is a dollar bill,” but real world money situations. Finance education has always been a passion of mine because I believe it is the parents’ responsibility to prepare the child. The schools do not teach money management, how to make your money work for you, thrifty shopping, etc. From a very young age, my children have been involved in many real world situations where they are able to get an understanding of money.

teaching kids about money

teach kids about money

teaching kids about money

Below is a list of some of the ways work to teach our kids about money in our everyday life:

  • First, and most importantly, we embrace any attempt at entrepreneurialism.
  • They have always had a piggy bank (they recently graduated to wallets) where they would put spare change. When the banks were full Mr. Will would help them roll the money and take it to the bank. They would first start with separating it into like kind piles, counting the number of coins needed for the roll and then filling them.
  • As soon as they were old enough to walk they started helping my dad with his vegetable garden and graduated to having their own. Avalon has now gotten to the point where she can plant, grow and sell her veggies. She usually only gets a couple days of selling at my parents’ summer place but it is enough to teacher her about sales, advertising, and money (math). Oh, and how can I forget customer service.
  • They have always been part of the “apple business” in one capacity or another. I started by taking them with me to just hang out and now they are full-fledged sellers of apples, cider, and pumpkins. When it comes to their pumpkins I let them decide how they will market them, their pricing strategy and how they approach customers.
  • I am not afraid to discuss how we cannot afford something with my children. It is important that they understand we do not get everything we “want.” Also, it teaches them about deciphering between what they want and need.
  • When we find money on the ground we always pick it up, even if it is a penny. If they find larger bills we always try to find the rightful owner before we decide to keep it. “Find a penny, pick it up, all the day you’ll have good luck.”
  • We have open discussions in our house about college and how expensive it is. We talk about how we all must work together to save for this big event.
  • The kids are expected to donate a percentage of their earned money to a charity of their choice and to their college fund. We give them the liberty to do what they want with the rest. Although we are not always a fan of their choices (our daughter is on her 4th American Girl Doll) we let them decide and learn from it.
  • We have started introducing the topic of “interest” to our eight year old. She is confused about why we have to pay people to borrow their money. Her response is “just save enough to pay for it and then you do not need to borrow any,” I love that she is thinking this way.
  • Both children have a savings account at a bank and make regular deposits to it for college.
  • We try to be a model for smart spending habits. We have conversations about how and why we do not have cable, why we use public transportation, the value of the public library, how to get free museum passes, etc.
  • We have talked about “equity” in relation to real estate property and how you can get someone else to pay the mortgage while you get the equity.
  • We have discussed “compound interest.”
  • We talk about how money does not buy happiness.
The true joy has been in the impact it has had on their self-esteem. They are in charge of their own money and purchases which makes them feel so grown up.
teaching kids about money
teaching kids about money
teaching kids about money
How do you work on teaching kids about money? I would love to hear how you handle this topic. We can learn so much from each other if we share. Is there an age that is too young? Are your children in a school that values financial education? How can we all work together to make financial education a part of young children’s lives?

hugs and kisses,
Gumdrop Mom

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