Teaching Kids About Money

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How teaching kids about money can be fun

Helping young children understand the value of money is so important. Especially in this day and age when everything seems to be getting more expensive, but wages are staying the same.

Learning about the value and use of money comes earlier than most expect – in most schools, children are discussing and exploring money as early as 4 years old. We all understand the importance of being financially responsible and independent adults. Opportunities to teach our children about major life skills arise often, the key is knowing where to look for them.

Here we discuss ways in which you can begin explaining the role of money and the values that run alongside managing it.

Understanding money

Between the ages of 2 and 4 your children will become more interested in those funny little pieces jiggling in your purse. Let children be included in your weekly shop – passing over money themselves. Start to teach your little ones about the value of each coin. A good way to do this is invest in some plastic role play money for them to play with at home. Look at how the coins are different shapes, colours and what each coin is worth. Encourage your children to play shop keeper, helping them to understand that when shopping, money is exchanged for goods.

Earning money

From the age of 4 or 5 onwards you could start to give your child the opportunity to earn their own money. Usually through small household chores such as tidying their room, sweeping the floor, and helping clean up after dinner. The important thing to note is that it is not about the amount of money at this stage, but the simple act of a child doing something and being rewarded for their efforts (earning instead of being given). This feeling of accomplishment and reward is what drives most of us as adults, and it’s important to give your child opportunities to feel the same way. When they work hard and earn money for it, this makes them feel like it is a real accomplishment – something to be proud of and celebrated.

Teaching Kids About Money

Spending and saving

Once your child has earnt a certain amount of money they will be keen to spend it. It’s easy to want to control this and stop them from blowing all their hard earned cash on that cheap useless toy that you know will fall apart in seconds. But now is the time to stand back – let them make mistakes. Children aged 6 and over should be gently encouraged to set bigger goals (If you saved your money for x weeks you could then afford x). Try not to stand guard. If you constantly rescue or manage your kid’s decisions, they’ll never learn the consequence of their choices. It’s important for them to learn that once you spend that money it’s gone. Setting goals will come easier as they get older and after a few poor choices, children can show great restraint at saving for that special something.

Be a consistent role model

Children watch us and learn. When shopping, talk about things you’d like to buy but can’t afford – explore the difference between wants and needs. Be an example to your child and try to demonstrate the values which you wish them to learn and gain themselves. Be consistent in your actions. Demonstrate that saving money and having a goal to work towards is hard work, and it doesn’t always go to plan. However, when it does it’s incredibly rewarding. Celebrate all their achievements with savings and showing consideration with their choices with enthusiasm.

As children get older, involve them in budgeting for the week, shopping for best deals and talking about exciting future plans and the savings that go alongside them. The more you involve your children with the everyday choices surrounding money, the more you are helping them to become equipped at managing it on their own as financially responsible young adults.

If you yourself are having troubles with savings and need help managing your cash, contact the Gold Coast accountants, IQ Accounting today on 5576 0011. Our team of highly skilled accountants and bookkeepers can organise a cash flow budget for you specifically and have you on the road to debt free and saving in no time.