Six ways to teach your children about saving and spending money

Our family lives for today and saves for tomorrow and one way of doing that is to teach our children about money.   There are several  learning activities and opportunities you can share with your children to teach them about money, its value and how to responsibly save and spend it.

Talking about money is normal.     I don’t think there has ever been a time that my four children haven’t heard money discussed in our household.   They may hear Mr. Money Saving Parent and I having our monthly business meeting or discussing savings, paying off debt or even just how to save money on our grocery or electric bill.  Many marriages have money troubles because couples have trouble talking about money.   You don’t have to dwell on it, discuss it with others or share your bank balance but by having a normal discussion in front of the kids you will show them how to talk about money as they grow and when they get older.

Count your blessings – or in this case your money.   As soon as your children are old enough to count you can start teaching them about money.   Try counting money, either using change from the piggy bank, fake money, Monopoly money or even a workbook.   Counting how much they have and how much they will use to make a purchase is one of the first steps in teaching them how to spend and save money responsibly.

Bring them up with a budget.   My seven-year old asked me the other day “Is (insert item, want or need here) in our budget this week mommy?”   Whether you have a little or a lot of money, teach them that a budget can be beautiful.  Show them what a budget is.  One way of starting that is by explaining that “No, we aren’t ready to buy that now, but we could save for it and buy it next week.”    In the early elementary years you can show them that there is x dollars in wallet and those dollars are set aside for the items you came in the store for.

Make it fun!  So far it sounds pretty dry doesn’t it?  It doesn’t have to be.   Play money games online, play money board games that are anything but boring (my 7 and 6-year-old love Monopoly Jr. ) and do creative play using play money.   One fun way to teach children about money is to use empty boxes from the pantry, assign values to them and then go grocery shopping in the house.   Add up how much the groceries costs and balance it with how much your child has.  My budding stylist/fashion designer likes to do it with clothing as well as with make-believe movie passes.

Allow for an allowance.   I know that there is a great deal of controversy about allowances.   We have an allowance and we have chores. First the kids have chores that they must do. We all live together so we have to all work together to keep it nice.   But, if the children do something extra helpful or take on additional tasks they receive an allowance.  Since they are young we try to help guide their money spending decisions, but if they earned it they can spend it, save it or share (charitable contributions) it.  They even have “piggy banks” to help them decide.

Show off!   Are your children competitive?  Mine are and one very effective way activity that helps them learn about saving money is to give them their savings statements.    They love that they get mail with their name on it and it is even more exciting to them to see that there is x number of dollars in their savings/educational accounts.   They will compare each others balance and try to think of other ways to save money like doing more chores.   A little bit of positive reinforcement and a growing bank statement can go a long way in teaching children to save.

Information contributed by Genworth Financial