How To Make Money Fun – For Kids At Any Age

October 31, 2016

HOW TO MAKE MONEY FUN – FOR KIDS AT ANY AGE

When I graduated college, I had a degree in Accounting, and yet knew very little about money management! I didn’t know the best way to manage my student loans, pay off my credit card, and contribute to a retirement account. The truth is, kids don’t learn these concepts in school and many are sent in to the “real world” on their own with little to no knowledge of how to effectively manage their finances. I’ve put together this age appropriate list for parents, so you can start teaching your kids about money (with a few freebies)!

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HOW TO TEACH YOUR KIDS ABOUT MONEY AT ANY AGE

What is money – At a young age, kids can be taught what money is. You can show them that you pay for everything with money when you check out at the store. Maybe even let them hand the money to the salesperson! Point out price tags at the store so your child can see that it costs something. Play money – Make money fun by including it in your kid’s games. I love the idea of getting a cash register toy to show young kids how money works. They can give you toys in exchange for play money and vice versa. Practice counting out single dollars or pennies since this will help with counting as well! Win win Piggy Banks – Once kids have a basic understanding of money, you can start to teach them about saving. I love piggy banks, there are so many cute ones out there! Help your kiddo put their birthday money or the penny they found on the ground right into their piggy bank! It’s also a great way to get rid of loose change in your purse 🙂

6-12 Year Old

Chores – Once you’re comfortable with your child doing chores, I’d say it’s time to start teaching them about earning money! Many parents have different views on whether or not to pay for chores. In our house, there’s essential chores that we are each responsible for. In real life, there’s things we all have to do and we don’t get paid to do it! Feeding the family pet, making the bed, putting laundry away….these fall under “essential chores” for us and there’s no reward. However, you can offer additional jobs that can be done for a certain $ amount. For example, raking the leaves or shoveling snow. You can also offer a flat allowance. However you choose to go about this, I think the important thing is that your child learns that they can work a little harder and that’s how they earn money. Counting Money – When you think about it, money can be complicated to count. $5, $10 bills and then add in change and it starts to get tricky. Teaching to count money is actually a great way to teach fractions and multiplication so you’ll really tackle a few obstacles with this one. Make it a game and check out this FREE printable from Mama’s Learning Corner to help with teaching your child to count money! Spending Wisely – I know I know, who needs to be taught to spend money? Well, I think that we all need to learn how to spend money WISELY. Smart money habits include smart spending because at some point, we all need to spend. You can use coupons to show the art of discounting, or one trick that I love, is to take your child to a store with expensive toys, then take them to a dollar store (or somewhere similar) so they can see the pricetag variance for similar toys! Kids at this age aren’t usually very picky with brands yet, so a dinosaur is a dinosaur whether it’s $1 or $5. Saving Money – Now that your child is old enough to learn about spending, you can also teach them about saving (beyond the fun of a piggy bank). Ask them what they want to buy and then offer them advice on how much they’ll need to save. You can put it into terms of “you will need to shovel the snow 3 times this winter to save up that much, are you up for that?”. You will probably have to remind them, often, of what they’re saving for. Overspending – This is a tough one, but it’s an important lesson to learn. At some point, your child will say they’re saving up, and might even promise to shovel the snow 3 times. But then they’ll see some stupid, cheap awesome toy that they just “have to have” and will want to blow their savings on it. I recommend you let them do it! It’s one of those things we all need to learn the hard way. They may be disappointed the next day when they realize they wasted their money, but they won’t forget it! It will make for a good lesson for them to refer back to, and hopefully give you leverage to help them second guess those impulse purchases.

13 – 16 Year Old

All of the above – At this point, you’ll need to continue reiterating all of the concepts you introduced above. Your child might be getting a babysitting job rather than earning money with chores, so they might be tempted to forget what you taught them once they have more money. Keep instilling good habits! Fun without Spending – While I think it’s great for kids to learn that things cost money, they’ll hit a certain age where they think everything costs money, so it’s no big deal to spend. They’ll say “mom, it’s only $20” and you’ll wonder what silver spoon they were born with. This is an awesome opportunity to point out that going to the park, free day at the zoo, or going for a hike are all things that DON’T cost money. We can all find ways to have fun without spending money! Interest/Credit – Sign up your teenager for a credit card (gulp)! Most credit cards allow you to sign up a child so the balance is low and it’s connected to your account. Of course, you can hold on to the card yourself, but don’t just sign them up to “earn good credit”. Give them the opportunity to use the credit card for some purchases. If it’s a Monday and they get allowance on Friday (or payday from their job) you can show them the power of spending that money as long as they KNOW they’ll have it to pay off the balance. Which brings me to my next point, let them pay the bill. Seriously, show them how there is a minimum payment and how paying the minimum payment vs. last statement balance will cost them more money. Oh, and if they get out of hand and do spend more than they can pay, pay off the last statement balance for them! You don’t want to be stuck paying interest either 🙂 And paying off the balance on time WILL help their credit score too. Save/Donate/Spend/Invest – This is an important concept for everyone to learn. I think someone who has healthy financial habits will divide up their money into these 4 categories. We have this piggy bank which divides your money into these 4 categories depending on where you drop the money!

Compounding Interest – If you’re signing up your 18 year old for a student loan, they should at least understand the concept of compounding interest (paying interest on interest) before signing on the dotted line. Show them the amortization schedule so they really understand how much they’ll owe. And then encourage them to sign up for as many scholarships, grants, or aid as possible!

Retirement Accounts – When your child gets their first “real” job (yay!) make sure they understand the different retirement accounts offered (typically 401K and/or Roth 401k) and what it means to have employer matching. As a rule of thumb, if you can afford the money to be taken out of your paycheck, you should invest at least the same amount that your employer will match. This ensures you take advantage of free money without leaving anything on the table!

What other techniques have you used to teach some of these concepts? Any other lessons that I missed?

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