Parents, April is upon us and that means we are thinking about money- either filing our taxes or spending our tax return. April is also National Teach Your Kids About Money Month. While it is fresh in our minds, now is a good time to begin teaching our kids basic money skills that will guide them throughout their lives.
One simple way to teach children is to use three clear containers and label them with “Share,” “Spend” and “Save.” Even preschool-aged children can learn these basics. Using clear bottles (such as 2-liters) or jars helps children feel motivated to continue adding money when they can see their progress as their money increases in the container.
When your child receives money from completing a chore, for their birthday, or another reason, teach them to split their money between each jar. You can decide whether or not to divide the money equally or not. An important step is to explain to your child the reason for having each category. Some ideas are listed below.
Share: A common value we all have is sharing. Our children can learn to share their resources in a concrete way by sharing their money with a loved one or agency in need. As the saying goes, “See a need; fill a need.” Giving of oneself creates a sense of confidence and strength!
Spend: Why would we teach children to spend? Well one reason is that it is the process of getting things we want or need. Children will learn the difference between a “want” and a “need” when it is explained to them. Also, children will learn the value of their money and the ability to make wise choices when a caring parent guides their spending.
Save: There are several great benefits for learning to save money. The process of saving builds the muscle for learning to wait, which is a necessary skill for success. Saving also teaches the concept of planning ahead and following steps to reach a goal.
When teaching children to save, start with a small goal for the children to work toward such as saving for a specific toy, and with practice they can strive for a larger purchase. This will keep his/her momentum up to accomplish the goal. When enough money is saved, have the child be an active participant in every step of the process including:
- retrieving the money from the jar;
- going to the store;
- choosing the toy;
- and if they are able, paying for the toy him/herself.
And finally, praise the child for his/her hard work and responsibility! The same steps can be applied to sharing/giving their money as well. As your child grows, continue the steps above to strengthen these skills.
For additional information on teaching kids about money visit:
Nina Solomon, Development of Living Skills Instructor, OSU Extension, Butler County