5 tips for teaching kids about money

Tagged with: Easter, easter egg, how to, mom, money, saving, tips

by Kristina Sauerwein posted in Mom Stories

Today is the 16th annual Teach Children to Save Day, a nationwide initiative by the American Bankers Association that has helped 5 million kids learn how to save money.

Coincidentally, last week, my husband and I started giving our kids money. Specifically, an allowance of $1 a week for doing chores. Zoe is 7 and Ryan will turn 4 next month. Obviously, Zoe understands money better than Ryan, however, my little guy has an obsession with coins and, for a while, he was suggesting we buy this and buy that, as if money was no object, which it wasn’t for him.

So Zoe and Ryan got their first allowances. Ryan put it in a small piggy bank and then put his bank in a container and then hid the container somewhere (this is what he likes to do when he’s not running around, making artistic masterpieces or playing with my phone). I doubt the allowance concept resonates. He may be too young, but since his big sister is getting an allowance and he wants to do what she’s doing, we’re going along with it. Can’t hurt, right?

As for Zoe, she got her first lesson this past weekend on how much (or little) a dollar can stretch. She’s started collecting Japanese erasers for her “Eraser Valley,” inspired by the latest Ivy & Bean book. She got her $1 allowance, and gathered her spare change she got from Easter egg hunts. She wanted to buy a dozen or so erasers, which cost $1.09 each with tax. But she could only afford three erasers. After talking about monetary values and saving, she decided to buy two and save for more erasers or maybe something else.

I’m not sure if I’m teaching about money correctly, so I turned to Linda Descano, president of Citigroup’s Women & Co, a personal finance site aimed at women. Through a representative, Descano offered these five tips for teaching kids to save:

1) Treat everyday activities as teachable moments: For instance, during an errand to the grocery store, you can show children how to plan for purchases, make price comparisons, count money.

2) Show them results: Begin a family fund for a common goal, such as vacation, shared household item or charity. This allows each member to contribute and get excited about saving as well as giving.

3) Lead by example: For example, let your kids watch you paying your bills on time. Save money and demonstrate how you do so. Be a conscious spender.

4) Don’t hide your money mistakes: Most of us have made some. Talk about it freely and tell your kids how you learned from the mistakes.

5) Allow them to make their own money mistakes: Better now, when the stakes aren’t as high.

Here’s a bonus tip from me: Check with your financial institution about kid-saving programs or products. ING DIRECT, for instance, offers two kits to jumpstart your child’s saving habits: The Gift of Savings for Kids and The Gift of Money. Each kit costs $25 but includes $50 gift cards as well as other motivating items.

How did you learn about money? How do you plan to teach your kids?

Also, do you give your kids allowances? How much?

Read more from source:“babycenter-com-baby”