I often get questions regarding Teaching Kids about Money, I know that a lot of us are raising younger kids and while we are working to manage our budgets and save on everything we buy it’s also important to me to make sure I’m teaching the same values to my kids! I thought I would share a few of the things we are doing with our kids that is helping them understand and grasp the importance of money even at a young age.
We started teaching my oldest about Money when he was only 2. One of the first things we did was to teach our kids to start to budget their money, we do this with all the money they get weather it’s from doing different Responsibilities, From Birthday Gifts, or From Friends and Family Members. Regardless of how they earn or receive the money we divide it into 3 basic categories:
- Give – We want to teach our kids that’s it important to give first, we give out of what we have been blessed with, not out of what is “Left Over” So we always put 10% into the Give Bank.
- Save – The next bank we use is Save. We typically put about 20% in Saving and this money is saved not for an item they want but for long term goals, and goes into their Savings Account.
- Spend – The remaining money goes into the Spend Bank. I’ll talk more about this later in the week but we don’t buy much of anything (Especially Toys) for our kids out of “Our Money” I think it’s important to teach kids at a young age to make smart decisions about what they are buying and I find that my Son especially is more careful with what he’s buying when he feels like he’s spending his own money.
We use the Dave Ramsey Jr. Banks for our kids because they love the Junior Series Books and Audio CDs, we listen to these in the Car and also the books are some of their favorites.
You can also make your own Banks with Empty Coffee Cans, Construction Paper and Markers! This is a great way to get Kids Involved in the process!
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I love the idea of the kids making their own banks, at least when you’re first starting out. I think for older kids, though, sites such as http://bankaroo.com might be a better choice, simply because they speak to the love of technology kids these days have. You can use the site to set goals or track funds without any real money, so it works for anyone in any class. Plus, it’s available as a mobile app!
We’ve done Financial Peace Jr. with my daughter and we’re doing it in her Sunday School this Fall. It’s so easy for kids to understand concepts like DEBT, SAVING and BUDGETING when you listen to the stories and do the workbook. I highly recommend it. My daughter is 6 now and equates toys she wants with chores. She’s often murmuring at Walmart, “Now, if I rinse dishes after dinner this week, make my bed, water the flowers, feed the dogs and take my dishes to the sink, I’ll have enough money for this Barbie.” She also has “special” activities that will earn extra money (like taking things to our neighbors, helping people at church, walking one of the dogs, or helping with weeds in the flower beds). She’s saving up for The Olivia House in Lego’s Friends and it’s $70. In 2 weeks she has earned $25! It helps them to understand that money is NOT a hand-out. I have to earn it and so does she.