5 Tips to Teach Children About Money #CommonCentsDay

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How do you know you have grown up? A big indicator is when you start worrying about money. When you consider money before spending or doing something, I think that means you’ve grown up. Once you have children of your own, you have to figure out how to teach children about money.


5 Tips to Teach Children About Money

5 Ways to Teach Children About Money

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So you want to teach your children about money then, right? Here are some tips.

Teach Your Child the Difference Between a Need and a Want

We need nutritious foods to survive and grow. We want treats like cookies and chocolate. We need to pay the mortgage so we can keep our house and stay dry and safe. We want TV.  Explain that wants aren’t always bad, but needs come first and it’s best to consider how much we want something, it’s cost and how long we might enjoy it. (example I wouldn’t want to buy a $100 Dora toy because my child will probably outgrow it in a year or two.) Another part of this is to make sure you are not giving in to every want your child has.

Help Your Child Earn Money

It’s up to you whether you choose to do a weekly allowance or pay for extra chores but whatever way you choose to do it, you want  your child to have money coming in to them more than just twice a year (birthday and holidays.) It’s too hard to learn how money works if they only get large amounts twice a year. My kids have chores they are responsible for that they do not earn money for. They can earn money for extra chores however. Older children can exchange bigger jobs for money such as raking a lawn, shovelling snow etc.

Let Them Be in Charge of Their Own Money

When they are under 5, have them put money they get from people in a coin jar and save it up. After age 5, allow them to use some of it to make purchases such as counting out a few dollars and buying a treat from the store. Explain that this is their money and that they only get more money on special occasions. Explain that if they choose to buy a treat from the store, they will have to give the money to the store owner and get the treat in return but they won’t get the money back. Allow them to choose between a few treats of different prices.

When they are a bit older and you think they are ready, allow them to have a purse or wallet. Keep in it your care until they are ready to handle it. Allow them to use the money to make purchases every now and again. How you handle this will depend on how much money they get, how old they are and more. My girls (ages 7 and 8) keep their money in their purses. When there are special school lunches (like pizza day) or they need money for a school shirt or something important, we pay for it. But if they want to buy a treat from the lunch program (like chips or frozen yogurt) or participate in special days that aren’t full meals (popcorn day, hot chocolate day) they pay for it themselves. This allows them to choose if they will spend the money for a one time treat or choose to skip the treat to save up.

Added in 2019 – My kids are 13, 12, 8 and 5 now. They all do daily chores for allowance but I also ask them to do extra chores that aren’t paid but are just because they live here and have to contribute. The older two have bank accounts now so they can save bigger amounts. (see below)

Help Them Understand Debit and Credit Cards

When they ask questions about them is the best time to talk about it as they are interested. Most kids assume you can get unlimited money by using the card. They need to know that the card only gives money that an adult has already put money on it (debit) or it is borrowed money that they have to pay back with interest (extra money above the original amount.)

Play Games That Teach Them About Money

There are quite a few games out there that will help children with understanding a complicated concept such as money. Play them with your children to aid in learning. I’ve compiled a list of games that teach about money on my gaming blog.

Common Cents Day

Gail Vaz-Oxlade whom you might know from Till Debt Do Us Part, Princess or Money Moron TV shows or her many books on personal finance strives to help Canadians beat financial anxiety and achieve financial literacy.

Gail launched Use Your Common Cents Day on November 4th to educate Canadians on budgeting and financial literacy. November is Financial Literacy Month so as you can see, it was a good choice.

Fact: 1 in 3 (31%) of Canadians identify November as being a month their budgets get derailed due to unforseen holiday spending.

Look for helpful tips and advice from Gail on savingmadesimple.ca and join over 1 million Canadians to access print at home coupons to help you save on everyday household projects like Tide laundry detergent.

Learn more from Gail Vaz-Oxlade on her website. Also check out these helpful posts for adults from some fellow bloggers.

More on Financial Literacy

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10 Tips for Staying on a Budget

Money Cents for Young Adults

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