Chances are, you have dedicated a lot of time to managing money. Whether you’ve taken courses like Financial Peace University or learned to budget through your bank’s app, there are many tools to help you become financially literate. These are great, but are you also finding ways to teach your child about managing money? Here are a few ways to help your child learn about money and how to manage it.
Help them divide their money habits into categories
Most money habits can be put into one of three basic categories: saving, spending, and giving. Help your child think through the last few times they used money, and decide which category each choice belongs to. If they don’t use money yet, try using examples of times they have seen you do things with money, like purchase things or give an offering at church. If your child has an allowance or earns money, a great visual to help them understand this is a three-part piggy bank. Help them divide what they earn between the three parts, and at regular intervals help them empty each category in an appropriate way.
Teach them to compare prices
As your child learns about spending, teach them to compare prices between similar items to get the best deal! A great way to start this is taking them with you to the grocery store, and having them compare prices between different items that are there as you shop. Whatever you are purchasing, if there are several options, let them look at how different options have different prices. This may also be a great time to teach them about budgeting! Talk to them about how much groceries cost, and how you keep track of how much money you’re spending. Refer back to the three-part piggy bank, and how that’s a simple version of your own grown-up budget.
Let them earn money and make small mistakes
As your child gets older, encourage them to find ways to earn money. Many teens do jobs around their neighborhoods such as babysitting or yard work for some extra cash! Once they have this income, let them make choices and mistakes with this money. It is far better for them to learn mistakes while they are still in the safety net of your home. If these lessons wait till later, they may be more severe, involving credit cards or missed bills.
Now, get ready to start teaching your child how to manage money!
