Take 10 seconds right now and try to remember the exact moment when you first understood what money was, and why it was important to society as a whole.
- What emotions did you feel?
- What possibilities did you create in your mind?
- What attitudes and/or beliefs overcame you at that very instant?
Now, what about after learning money’s purpose in society and after experiencing the markets and investing world each and every day of your life? How has your education and view of money changed over the years since that very first instant where you finally figured out what money was?
Pretty different viewpoints wouldn’t you agree?
Now imagine yourself as a parent (even if you never plan on being one, just work with me here)…and you decide to bring a child into the world.
Knowing the experience that you went through as a child and young adult learning about money, how would you teach your child the important skills and information they must know to set themselves up for success not only financially but with their investments as well?
How would you teach them in a cool way without boring your kids, or even worse, making them hate you?
With our children being the future of America, arming them with the skills and tools to effectively navigate through their future is one of the greatest gifts we could give them as the world continues to grow and evolve through time!
Hopefully these ten suggestions below will aid you in figuring out how to effectively do this to ensure that your current or future children grow up financially prepared to tackle the real world ahead.
1. Educational and Interactive Board Games
There are various games in the marketplace that you can purchase for your children that teach them the life skills needed to be successful in life. Most of them vary in price but there is one thing for sure, these games not only get your child thinking but also do it in a way that doesn’t pin them with the “real world consequences” of their decisions if they make a mistake in the games. Playing in this fashion with family is a great way to collectively teach each other and experience each learning point together. In the game pictured above, Thrive Time is one such game that is a great way to get your kids thinking about the future choices and challenges they will be facing as they grow and mature.
2. The Good Ole Lemonade Stand
Teaching your children by giving them the freedom to open up their own lemonade stand on a sunny Saturday afternoon is a great way to teach your children how to manage their very own business operation, while also possibly managing a couple employees themselves. Teaching them in a way where they have to manage something while focusing on a product and working with people is a great first step to exposing them to the business world.
3. The Brainstorming Money Day
Getting you and your family together either once or twice a month to brainstorm creative ways to make more money is a great way to get your child thinking about money, business and investing. To creatively do this without making your child bored, taking them to the park, or brainstorming over a picnic on a beautiful day. This gets your kids thinking about creating various income streams in the present, but in the future too. By getting your child to think in this fashion, you begin to open up the curiosity within them to search on their own without your help.
4. Reward Monthly Creative Thinking
If there are several kids in your family, a great way to teach and reward them on a monthly basis would be to run a monthly contest amongst them to see who can create the best idea for a business or an investing strategy. Give them the challenge at regular intervals and reward the one with the most compelling idea. Awards could be a free ice cream trip with them and a friend, or really, anything else you and your children would enjoy. By rewarding this way of thinking, and adding the contest element into the mix, you again help them to start thinking about the bigger picture.
5. Include Your Children Into Bill Pay
One of the many things most of us can relate to in our lives growing up is that talking about money and finances seems to be somewhat of a “taboo” topic. Because we tend to avoid talking about money with our parents, the feelings and uncomfortable emotions are carried on into adult hood. One creative way to teach your kids about money is once a month, or once every other month, have them help you pay the bills. Be sure to show them where the bill is coming from, what the statement means and have them help you stuff the envelope and put the stamp on it. You can then take them to the post office, or ask them politely to put the paid bills in the mailbox for the mailman to pick up. By showing your children responsible habits when paying your bills, they are destined to ask you questions. Thus making this simple task we all do once every month truly invaluable.
6. Watch The News With Your Kids
Watching the news or 60 minutes with your children is a great way to be there to help them understand things going on in the economic world of business and investing. By being a good parent and resource for your kids and by making them feel comfortable about always coming to you to speak about current economic events, it gives your child a way to further understand the world in a broader scope and how they fit into it. Depending on what is going on in the news, you can relate the conversation back to money experiences you have had with them in the past, or even some of the activities we outlined here in this post.
7. The Chore List
We all remember a time when we did chores around the house for a weekly allowance. Implementing this creative way to get things done around the house, while compensating your children for their good work is a great way to help your child learn good money habits as they grow and mature. You can create a chore list with a sticker/star system for every one of your children, and at the end of every one or two weeks. you can then pay them what they earned. This is powerful because not only are you making your children more responsible, you are also communicating to them that you are respecting and appreciating their hard work.
8. Give Educational Money Books as Gifts
Giving the gift of knowledge to your children around birthdays, and the many other holidays we all celebrate is a great way to introduce specific education to them without shoving it down their throats. By letting them absorb financial knowledge through time, you are giving the words time to sink in.
9. Share Your Investing Successes
The more you can incorporate your children into your financial and investing life, the more open and receptive they will be to learning about money and investing in the days and years to come. If at the end of the month you got a greater return than you expected on one of your investments, feel free to share with your kids what happened and the positive impact it has on you and your family. You never know what kinds of questions will come up, but any question you can help answer will lead to a greater understanding of money and investing for them.
10. The “What Should I Buy Game”
A great way to have fun and educate them about money when you are at the store is to have them help you make the purchasing decisions for products that you plan to buy for your homes food supply. You can creatively do this when you shop by integrating coupons and also by helping them read the description of each item on the shelf. Ask them, for example, “Johnny, should I buy this item or that one…which one do you think is the better deal?” Having them make real world decisions is a great way to learn. But try not to let your kids have too much freedom of choice or you might end up with a shopping cart full of Doritos!
That just about wraps it up. If you have any other ideas in educating your children, feel free to share your experience in the comments below so everyone benefits from the conversation.
{ read the comments below or add one }
Awesome article, there’s such much media and advertising influence that tell our children exactly the wrong kind of things about saving money and investing wisely, we really need to do the educating ourselves.
Will
A wonderful set of tips and good illustrations to help little ones get the message.
Good stuff. Reminds me of the story in Rich Dad, Poor Dad about teaching the kid about business by renting out the comic books. Hustling. Love it.
This is great. I wish it was common practice for parents to do this, or even for schools- I don’t know why schools don’t teach practical money tips. Kids should be raised to be entrepreneurs rather than employees.
Teaching children to make money is very unwise. Teach children to share and give. That is the only way there will be any future left for them. Money will always create inequality. Sharing is the only way that will ever make sense. Of course to do so we must catch up to the other species on the planet and pay attention to what we’re doing.
Money is only necessary as long as we devalue ourselves enough to think that we need some sort of pieces of paper to organize ourselves. Have some faith in one another. Have some faith in yourself.
With the garbage they put on the nightly news each night, no way I’d watch it with them.
for number 4. Reward Monthly Creative Thinking:
It has been discovered that reward systems for creative thinking inhibit progress and performance with anything requiring cognitive skills more complex than simple math. Instead, create opportunities that encourage creative higher level though processes. For example, picking a day of the week to allow your child (or even better, children) to do anything creative that he or she wants with whomever he or she wants with the caveat that the results of his or her (or their.) work must be shown at dinner (<- bonus family time here) will give your child(ren) a chance to show off their creative side to you. Everyone has a deep-seated need for affirmation and acceptance within their social circle, and it's this psychology that will encourage your child(ren) to challenge and improve their creative skills. If you and your spouse spend the day working on a creative project of your own with the same show-and-tell caveat, it will further encourage better and new ideas within your child(ren).
Encouraging creativity with a reward system has the possibility of creating disappointment with the increasing lack of rewards for creative behavior and thinking as they mature.
Thanks for this article. Not easy to find good ideas on how to teach kids about money.
May
Great post that is right on the money, pardon the pun.
Ours is very young now but we plan to follow most of these ideas, especially about the book and news.
Personally, I don’t watch the news and I don’t want my kids to watch it, because it doesn’t present the truth about the world and is mostly horrible.
However, your advice is great and teaching kids about money is very important. The only thing to ensure is to present each of these items when the time is right and when the kids are ready. Pushing to hard or too soon will only do the opposite.
Great post.
When I was reading this post, I couldn’t bring to mind the first time I realized the purpose of money per se. What I did remember was my first serious thought about money… I was riding in the car with my mom, and I asked her why people cared so much about money. I couldn’t understand why people were so upset about not having it, and why they spent so much time trying to get more of it. It just seemed so useless to me. I asked her something along the lines of, “why is there money? Why can’t people just have what they need when they need it?”
I was thinking mostly of things like food, and clothes.
She answered with her usual, “that’s a very good question. I don’t really know the answer. What do you think?”
I hated when she turned things back on me like that, but it did make me think more about it.
I was probably 7 or 8 at the time, and it wasn’t until MUCH later in life that I learned not just the importance of money and finance, but the purpose behind it.
I don’t have to imagine being a parent, and I have done my best to explain to my children (both under 6) basic economics in terms they can understand.
A while back my daughter asked why we had to pay for apples at a local apple farm. I explained to her that the man who owned the farm spent money and time to grow the apples, and that when we give him our money for the apples, he then has money to feed his family or grow more apples.
It doesn’t need to be a dissertation of economic theory, but it’s amazing how much they will figure out on their own when you put things in terms they understand.
I don’t care what my kids learn. I steal my money and I hope they can figure out how to do it, too. Of course, I’m in Jail here in Tennessee for embezzlerment. So what?
Can’t seem to google it right now, but Rockefeller or one of those tycoons had an allowance contract with his kid where he’d add another 50% to his allowance if the kid put it in savings. Similar to a lot of employer-matching contributions to pension plans, but a great way to really encourage saving instead of spending.
A fantastic set of guides for the young ones. We are looking to introduce finances to our children who are very young and this is packed with ideas.
Great post. I agree that educating your child from a young age will help them develop good money management skills. I know we did this with our son and at age 20 he has good finances, and thinks hard before making a purchase. Thanks for the information.
We have 5 kids, and we homeschool, so I really appreciate the ideas and tips you’ve shared here. I definitely want to equip our kids to be successful in money, and life.
Great post.
I have two teenage boys and for the longest time, they have been allocating their pocket money and cash gifts as follows: –
1. Save (50%). Goes into a savings account/money market account at local credit union.
2. Give/Charity (10%). Just an old jar which is emptied at Christmas for gifts at Childrens Hospital.
3. Spend (40%).
When they first started they spent all of the 40% – they couldn’t wait to get to the stores. Now they are saving probably 60% – 70%. They’re also starting to invest their money with some of their Dad’s ventures (Green Build).
As you point out, board games also work really well, particularly Cashflow.
Great article. It is very important to educate your children starts from a very young age. No matter how much money you can give your kids in the future, nothing is more valuable than a correct investing/spending concept.
Thanks for the post.
I think my parents put me through a lot of these little tricks to teach me about money. On the game front, I would say Monopoly was a big help. That said, if my parents had given me a financial book for Christmas, I doubt I would have been pleased.
Great tips. I never thought about including my children into the billing process, which is a great idea. If I start doing this, I bet my kids will start learning that money doesn’t fall out of the sky and they might even respect my cell phone usage rules.
Our money can be used in three ways :
1. Save (invest)
2. Spend
3. Give
I don’t have any children yet but all of your tips are great even for me 🙂 I’ve heard of some using the three ways mentioned and teaching children how to allocate some of there “earned” money towards each of these three important categories. Great post.
Love the good ole lemonade stand. They are able to see immediately how much hard work it takes to earn X amount of money… Not only that, but they also learn about patience as they have to wait outside for a certain amount of hours as well. Ultimately, they’ll come to learn that making money isn’t easy and I think that will help them be conscious of how they spend their money later on in life, hopefully.
Great post. We’re expecting our first child in May and so this topic is something I’ve been thinking about quite a bit. These are all great tips that I’ll leverage. In addition, I want to focus on putting into practice sound financial principals such as saving and investing. My thought is with their chore money we’ll set aside 20% into their college fund, 20% into an investment fund, and leave the remainder as spending money or use it to save for a special purchase. We’ll do this together and track it monthly online so they can see the effect of their savings and investments. I hope by putting into practice early it will naturally carry over into his adult life.
Your children will definitely thank you later when they see that they’ve already accumulated a small fortune by the time they enter college.
I also think that having a session monthly where you look at your balance together is good because it naturally sparks conversation about money and how it relates to everything else in life.