Four Ways to Teach Kids About Money and Help You Raise Money Smart Kids - Part 1

No. 1: Is there a record of it? – Keeping good records of money saved, invested, or spent is another important skill young people must learn. To make it easy, they can use 12 envelopes–one for each month–with a larger envelope to hold all the envelopes for the year or you can use a spreadsheet. It really depends on the child’s style. Establish this system for each child in the family.

No. 2: Going Shopping! – Going to the grocery store is often a child’s first experience with money. Spending smart at the grocery store (using coupons, shopping sales, comparing unit prices) can save thousands of dollars each year for a family with children. To help kids learn, show them how to compare prices per item/ounce/pound/etc. Ask them questions to help them figure out the best item to purchase. On other shopping trips, you can talk to your kids about quality products, warranties, and other things to consider when making purchases.

No. 3: Let them spend! – Whether they make a great purchase or a poor purchase, they will learn from their spending choices. You can then initiate an open discussion of spending pros and cons before they make another purchase. Do not fall into the “I-told-you-so” conversation trap because they will stop listening. Asking them questions and letting them come to the conclusions on their own is the best method of teaching. Encourage them to do research and consider other things they could do with that money before making a purchase.

No. 4: Do they have ad sensibility? – Talk to your children about how to evaluate TV, radio, print, and digital ads. Encourage them to ask lots of questions about the ad. How does the ad make them feel when they see it/hear it? Is a price offered truly a sale price? Are there other products available that will do a better job, are less expensive, or offer better value? Remember to tell them that if something sounds too good to be true, it usually is.

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