The benefits will last a lifetime!
5 Fun Ways to Teach Kids about Money
by Anna Medici
If I had a nickel for every child who did not understand the value of a dollar, I would be very wealthy! If you think your child needs some help when it comes to increasing his or her financial IQ, try these simple and fun activities that will help your child understand the value of money and the power of savings.
1. Give Your Child a Needs-Based Allowance.
Figure out how much you spend on several necessities that need to be replenished regularly, like a toothbrush, toothpaste, soap, and favorite breakfast foods. Plan on giving your child an allowance (remember to include tax!) that covers these items and add 20%. Tell your child that he or she is now in charge of paying for these items and that there should be enough for him or her to save as well. If your child overspends and is unable to pay for the necessities, obviously you will need to bail him or her out, but make sure you explain how, in real life, this could cause a life-changing financial disaster.
Lesson Learned: Buy what you need; do not overspend or you may not be able to afford your necessities.
2. Make the Stock Market Game Part of Family Game Night.
Every week give each family member a thousand "dollars" to play the market. Of course, you will not be giving them real money but you will be giving every member of the family an opportunity to invest $1000 in stocks, bonds, exchange traded funds, or mutual funds. At the end of the week, calculate who wins and who is crowned "trader of the week."
Lesson Learned: The stock market has its risks and rewards, and can be a lot of fun!
3. Reimburse Coupons.
Before you go to the grocery store, give your child the coupon section of the newspaper. Tell your child to find and collect all of the coupons for the products you need and plan on purchasing. After you finish your shopping, add up all of the money you saved from the coupons and give the same amount to your child in cash. This is a great way for kids to feel like they earned money and, if you do not coupon yourself, will cost you nothing extra.
Lesson Learned: A penny saved is a penny earned.
4. Show Your Child the Bills.
If you use the suggestions above, your child will have a much better understanding of the value of a dollar. For him or her to really appreciate where your hard-earned dollars go, show your child your bills. Make sure you do not make your child feel guilty over the bills, especially if the bills are late. The point is you are showing the bills for perspective, but ultimately it is mom's and dad's responsibility to make sure they are paid.
Lesson Learned: The value of a dollar and the cost of necessities.
5. Practice Math Together.
Teach your child to add, subtract, multiply, and divide using financial questions and even using dollars and coins. How many dimes are in a dollar? A dollar is worth how many pennies? A dime is worth how many pennies? Ten pennies multiplied by ten is how many pennies? It will make math more fun and will provide for extra practice that will get your child ahead at school.
Lesson Learned: Arithmetic!
Reviewed January 2018
Take the Next Step:
- It is never too early to start teaching your children the importance of saving. Compare savings and money market account rates and open an account for them today.
- Take a look at these 8 things a financial professional suggests you teach your kids about money.
- Set the example! Develop these 8 habits that plug parental spending leaks.
- Learn more smart strategies for raising money-wise kids by visiting the Dollar Stretcher Library.
- It's tough raising kids today! You need every time and money saving idea you can find. That's why you'll want to get our free weekly Dollar Stretcher for Parents newsletter. You'll find great ideas designed just for parents that will help your family 'live better...for less'! Subscribers get a copy of our ebook Little Luxuries: 130 Ways to Live Better...For Less for FREE.
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