What we should teach our kids about money
Today is ‘Talk With Our Kids About Money Day’, and this should serve as a great reminder of how important it is for our children to learn about money and finances at a young age.
Noor Rashid might be at least four years away from getting a driver’s licence, but she is already running the numbers in her head for future car purchases.
“You have to figure out the gas prices, maintenance, the insurance – and all the factors that come into account,” Noor said on Tuesday after she and Annika Sharma, a fellow Grade 7 student at Hilltop Middle School, took first place in the Toronto regional Money Fair for their project on transportation budgeting. “You can’t just say: ‘I’m going to buy a $10,000 car.’” [Globe and Mail]
If you’re wondering where to start, here’s some money lessons your kids can benefit from:
- Money is finite: the saying “money doesn’t grow on trees”, is especially relevant to children. When they see you using a credit card or an ATM, they may not understand that money isn’t just readily available, that you have to work for it and that it’s earned.
- Budgets: start teaching kids young about budgets. If they receive money, allow them to assist you in breaking down what they can afford with that amount of money.
- Saving: try to combat the “spend now” mentality in kids by enforcing that putting money away allows them to purchase bigger items down the road. Use some relevant examples.
- Keeping track: develop a system to track where your child’s money is going, so that they can see how a budget really works and how to plan for the future. This will come especially in handy for them later in life when it comes to saving receipts, etc.
- Prioritize: help your kids make a list of what they want to spend their money on, and then prioritize that list. This helps open discussions about what’s really important and where money should go.
- Value of savings accounts: start a savings account for your child, preferably one that makes money over time. You can then show them how saving makes money and helps with investments.
- Sharing: educate on the benefit of sharing money with those less fortunate. For example, giving portions of money to charities or helping them find ways to give back on their own.
If you have other money teaching tips for kids you’d like to share, let me know about them on Twitter.
