8 ways to teach your kids about money – the financially independent parent way.
In my opinion, financial literacy is something that every person should be taught as a child. The school your child attends will teach them a lot of information, but they most likely won’t be teaching your kids about money or financial independence.
Your child’s financial literacy depends on you and I’m going to show you some ways that you can give them the head start you wish you had when you were their age!
8 Ways to Teach Your Kids About Money
- Set an Example. When you first set out into the world, did you have similar financial habits as your parents? I know I did. Save, spend, and invest like you would want your kids to if they were in your situation. They will notice what you do.
- Play Games. There are family board games like Monopoly and Life, but there are also money games for older kids and adults. My favorite is a FREE online game created by Robert Kiyosaki called “Cashflow.” You can verse players online while learning how to invest.
- Teach Them How to Make Money Like Adults Do. I do not pay my kids for doing chores around the house. Many people suggest that you pay your kids for doing household chores – but you won’t be hearing that from me. No one gets paid for chores at our house. However, I do suggest having your kids work for you. For example, I occasionally babysit for people. If my kids help me babysit, they get a cut of the money I earn. You should also teach them about entrepreneurship. Assist them in starting a small business. My kids started their first business at 6 and 10 years old!
- Let Them Spend Their Own Money. Watching the money leave their hands is going to show them how fast they can spend and lose their money.
- Show Them How to Maximize Their Discounts. My son usually wants to purchase expensive things. About a year ago we went to the mall and he wanted to go into a game store “just to look.” To no one’s surprise, he found a game that he just had to have! The game was about $40.00. He was ready to buy it immediately until I pointed out that he could buy it online for $30.00 and he could also use Rakuten to get additional cashback. He decided to go the online route and ended up keeping more money in his savings.
- Encourage Them to Purchase the Item Tomorrow. Most items will not sell out of stock the second they see it. A good rule of thumb to help avoid impulse buying is to wait a day or two and if they still want it, then let them but the item. Most of the time kids will either forget about it or decide against purchasing the item.
- Download Some Financial Apps. There are tons of apps that they can use to learn how to budget and to even make money.
- Look into a Custodial Investment Account for your child. You can get these accounts through a number of places (like Vanguard.) Even though the account is in your name, your child can deposit money and learn the power of compound interest. Check out this post on 3 Investment Options for Kids for more information.
Teaching your kids about money takes time takes time and patience. But, if you want your kids to manage their money when they are older, taking the time to teach them now will be more than worth it.