How to Teach Children About Money Management
Crafty Ways to Teach Your Children to Save, Spend and Give
Teaching children about money management is an amazing gift a parent can give. Make it fun and creative for a win-win! Starting around age three, a child can start to grasp the concept of allowance. This is NOT money we just give them. They must actually do something to earn it. The seeds you’re planting are work ethic, responsibility and persistency. Who wouldn’t want their children to learn those big three lessons? This is where it all begins. Let your child know that you’d really love some help around the house and that they can earn some money by helping out. That money can be set aside in one container for fun things like toys and games. A portion of it will be put in a container and saved for something they want in the future. Help them think of ideas as what that may be. Maybe it’s a more expensive toy or a trip to the Zoo. The last part will be put into a container to be given to other people who need it. Just like sharing toys, it’s important to share money with others who need it. Help them picture the place the money would go. Maybe it’s a food bank, a religious organization or an animal rescue organization. By helping your child visualize what the money in each container will be used for, it gives them a clearer motivation for earning the money and saving it.
Here’s the fun part. Make the containers! You have so many options when it comes to your saving, spending and giving containers. It could be glass jars with stickers on each container that help show them where the money is going. The spending jar could have toy, ice cream and game stickers on it. The saving jar could have a picture of what they are actually saving their money for. If they see every day an image of their goal and a place to put money away to accomplish that goal, the chances of success increase tenfold. Their giving jar may have images of animals, religious symbols or other children. This is their time to have fun.
You can also go to a craft store and buy paintable piggy banks. The ones we made at our home are three ceramic pigs that we used markers to decorate. Our Miss Spending Piggy is decked out in red shoes and pink bows with an ice cream cone on her belly. Miss Saving Piggy has pictures of rain clouds (rainy day fund), a rainbow and we just couldn’t resist another bow. Miss Giving Piggy has our best hand drawing of a dog (we love animal rescues), a cross for our church and a bright sun since the money inside is to brighten someone’s day.
The object is creative ways to help your children learn to work for money and then learn about money management through saving, spending and giving it away. It’s great for parents too! You get some extra help around the house while your child is learning responsibility. An added bonus is the next time your child begs for a new toy, all you have to do is say this, “Let’s go look in your spending jar to see how much money you’ve saved up”! Help them count the money and let them know how much they have to spend or save up for that toy. In our case, we had $7.00 saved up to go to the toy store. I explained to her that we couldn’t spend all $7.00 on toys since $0.58 was going to be taken by the sales person to give to Texas to pay for things like the roads we drive on. We could spend $6.42. We came home with stickers and a piece of candy that day. She cherished those items 1000% more than if I’d given them to her.
Those same containers can be places where birthday money goes. Once your child gets older, you can convert those jars into actual accounts at a bank. I talk more about that as well as other ways to plant financial seeds in your children in my book, The Saving Seed: Growing a Financially Healthy Family Tree. www.thesavingseed.com. 10% of book and workbook proceeds go into MY giving container to share with others.
Ashley Parks is a Certified Financial Planner and Author of The Saving Seed: Growing a Financially Healthy Family Tree; www.thesavingseed.com