Help your kids learn about money from a young age. Here are some important ways you can raise money-savvy kids.
How to Raise Money-Savvy Kids
Are you hoping to raise money-savvy kids?
We raise our kids to be happy and healthy and teach them all the life skills they need to be independent. But how many of us actually take the time to teach kids about money?
Kids learn everything they know about money and finances from their parents.
So by the time they are 18 and ready to be an independent adult, they should be well equipped with enough financial advice to make them successful.
But as parents, do we really take the time to do this? Do we sit down and teach our kids about money? Or do they just learn from what they see from us?
Get your kids started off on the right track by teaching them these super important financial lessons and make them money-savvy kids!
More more information on raising money savvy kids, check out this book.
How To Help Kids Learn About Money
1 – Teach them about money
It sounds pretty basic but you would be shocked to know how many parents don’t sit down and actually teach their kids the concept of money. By the time they get to middle school, most kids should be able to:
- Know the concept of money
- Create a basic budget
- Saving money
- Managing money
- How to earn money
At different stages in their life, every kid should be taught certain money lessons. So take the time to teach them about money and how it works.
2 – Open Bank Accounts
By either middle school or high school (early high school!) all kids should have their own checking and savings account.
Take them to the bank with you and have them sit down with someone who can go over the rules of having a checking and savings account. Teach them how to write checks and how to check their balances online.
This is an important step to teaching kids how to pay their own bills when they become adults. You can even go over with them how to pay bills online once they reach high school age and have their first job.
This is also a great opportunity to start talking to them about credit scores, what they mean, and why they are important.
3 – Teach Them How To Budget
Most adults still have a really hard time creating a budget and sticking to it. And it’s probably because no one taught them as kids how to budget for anything.
You can easily create a simple budget for your child, no matter what their age.
Elementary School – Have them pick an item they really want to get and work towards saving for that. They can earn an allowance and use a savings tracker to save for that item.
Middle School – Kids in this age group can start making money from others by babysitting or dog walking or other easy jobs. They can start to budget for all items they have ‘wants’ for. Such as a meal at McDonald’s, a pack of gum from the grocery store, or that new pair of pants they HAVE to have.
High School – It’s common for kids in high school to start their first job to learn how hard it is to make a buck, and the value of each dollar they work for. They can start to budget for things like clothing, makeup, and food when they go out with their friends.
4 – Take Their Money
One of the best things my mom did for me was to take half of all money I made as a kid.
At the time, I complained a LOT. I worked hard for that money! Every babysitting gig I had, every lawn I mowed. Half was gone.
When I started my first job at 15, my mom even made me cash my paychecks and give her half. Ugh. To work so hard and have taxes taken out and then half taken away… I would get so frustrated!
But you know what my mom did? She put it all into a savings account for me. Until I was old enough to deposit my checks and do the same.
And for all the complaining I did, I ended up having several thousand dollars in savings by the time I turned 18. Thank goodness my mom took my money.
Do your kids a favor and take part of their income and force them to save it. They will thank you for it later! And one day I promise you, they will be so glad you did.
5 – Make Them Work
The worst thing you can do for your kids is just giving them money and not have them earn it.
In our home, my daughter is responsible for certain chores that she has to do every week. She gets $5 a week in an allowance for her chores.
When she was younger, this was a lot of money. But as she got older, it wasn’t enough to cover the cool Starbucks drinks or new tees from American Eagle that she constantly wanted.
She begged for more money. But I didn’t raise her allowance.
Instead, I found ways for her to earn extra money. It started with things around the house that were outside of her normal chore list. She helped wash windows or mop the floors.
As she got older, she wanted even more money. So she started asking friends and neighbors if she could babysit, pull weeds, walk dogs, etc. She realized very quickly how much hard work it took to earn enough money to buy the things she wanted.
6 – Let Them Have a Credit Card When They Become Teenagers
I know it seems scary to give a teenager access to a credit card and not think they are going to rack up a ton of debt.
But giving it to them early and teaching them the rules of using credit cards responsibly, could make all the difference when they become adults.
Talk to your local bank about credit cards for teenagers. There are some that have really really low limits like $200. So even if they go crazy, they can’t go TOO crazy.
And getting that first credit card bill and having to pay it off at the end of the month, is a lesson better learned in the safety of home.
7 – Set Them Up with a Cool Savings Tracker
You can get a fun savings tracker for little kids to show them how to save their money or a more sophisticated one for teenagers.
Either way, giving them a savings tracker at a young age is a great way to show them how to keep track of finances.
A kid who starts off with savings trackers is more likely to become adults you use a budget and track their expenses.
Make your kids Money-Savvy
Everything your kids learn about money and finances will come from you. So start them off on the right foot with these money-savvy tips.
Prevent your kids from struggling with finances as an adult. After all, you don’t want them to depend on you financially for the rest of their lives!
Teach them these skills to send them out into the world as money-smart adults.
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