Kids and Money – Introduce Them to Each Other Early

by Sean Bryant on February 5, 2014

Kids and MoneyAs parents we are always looking out for our kids best interests. We want to teach them the difference between right and wrong, or the proper way to treat people.  Sometimes though we forget about one major lesson, which is money.

Often times parents don’t associate kids and money in the same thought. Unfortunately, that is the complete opposite way that it should be. Kids are very impressionable. How many times have you said something and found that they started repeating you? The same thing goes for your actions.

If your kids see you whipping out your piece of plastic to make all your purchases you need to explain it to them. Teach them what a credit card is and how it should be used. My wife and I use our credit card for everything. The reason for that is not because we need to, but because we use them to attain airlines miles. We use those miles towards free travel.

As parents we need to understand that there is a need for financial literacy education when it comes to our kids. The ugly truth is that they are not going to learn most of this in school because our education system lacks a desire to teach personal finance. That means it’s our responsibility.

When I talk to different readers who have struggled in the past or currently struggle with debt, the common denominator between all of them is that no one ever taught them how to properly save and spend their money.

How to teach your kids about money

Let’s face it money can be pretty boring unless we are spending it. We need to make it fun for our kids and that is made much more simple with all of the online games that are available.

The Great Piggy Bank Adventure

T. Rowe Price and Disney have partnered to create an interactive game called The Great Piggy Bank Adventure. It will teach kids the importance of wise financial decisions through the use of a talking piggy bank.

Use games as a teaching tool

Monopoly, one of the most popular games of our generation, is also one of the best learning tools when it comes to money. It allows kids to have fun because they are competing in a game, but it also gives parents the opportunity to use it as a financial learning tool.

Money Savvy Pig

Most traditional piggy banks come with one slot. In reality, this doesn’t do much good when you are trying to teach your kids about money. Instead you could use a Money Savvy Pig which includes four separate sections; save, spend, donate and invest. This will allow you to teach your kids about goals and have them save for each thing.

Be honest

Last, but certainly not least, is to be honest with your kids. If you are having a problem with your finances make sure you include them in the conversation to a certain extent. There is really no better way to learn than by experience. If your kids see you overcome adversity, that is going to go a long way, compared to keeping them sheltered from the less than pleasant truth.

Final thought

Money can be a sticky situation with a lot of families, but it shouldn’t be. Teaching our kids the importance of sound financial choices from an early age is one of the most important things that we can do as parents. Embrace the opportunity and have a conversation about money with your child tonight.

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Sean Bryant

Sean Bryant created in 2011 to help pass along his knowledge of finance and economics to others. After graduating from the University of Iowa with a degree in economics he worked as a construction superintendent before jumping into the world of finance. Sean has worked on the trade desk for a commodities brokerage firm, he was a project manager for an investment research company and was a CDO analyst at a big bank. That being said he brings a good understanding of the finance field to the One Smart Dollar community. When not working Sean and he wife are avid world travelers. He enjoys spending time with his daughter Colette and dog Charlie.

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  • I plan to teach my kids about money at a very early age. A lot of people don’t believe in allowances but I do, I believe it will teach a kid how to manage a steady supply of income.

    • I agree Marvin. My daughter is only 15 months, but I fully plan on implementing an allowance once she is old enough. It’s a great learning tool.

  • Lindsey@ Sense & Sensibility

    I like the Money Savvy Pig idea – it’s a realistic way to divvy up money and you can get started with it from an early age. I also started involving my daughter in our larger financial decisions in an age appropriate way. If we want to save up for ABC, then we might have to forgo XYZ right now. This has helped her develop perspective around money and play the long game with money, when it’s required. Cheers!

  • I always hated that tiny slot in the piggy bank. I remember trying to turn mine upside down and shake out some quarters so I could get gumballs at the mall.

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