Each month, this series introduces fun and impactful healthy habits to help families with kids and teens prioritize physical, mental and spiritual well being – fostering a lifestyle of shared growth and lifelong wellness. Healthy habits built together are the ones that last a lifetime.
Did you know that only 23 states in the US have personal finance courses as a high school requirement? It’s no secret there is a learning gap among American adults when it comes to financial literacy. The truth is that learning how to manage money earlier in life helps set us up for success in the future.
The best way to ensure this knowledge gets to our kids is to start at home!
How Money Management Impacts Childhood
While money is a numbers game and can be seen to be very black and white, it’s more emotionally driven for many adults. Developing a positive money mindset and learning to handle money in a healthy way gives your kid more than just budgeting skills. You can help build an eventual pathway to financial freedom, while also confident decision making, goal setting and a positive lifelong relationship with money. You don’t have to go all in on making money and finance a core topic in your house, but you can take small age-appropriate steps that help alleviate confusion and negativity surrounding money.
Building Money Blocks That Last
It’s a common misconception that topics like budgeting or saving are too advanced for most young kids. The same way we introduce manners or healthy eating, we can teach basic concepts of money management that will grow more advanced over time as they get bigger.
Start with simple ideas like:
- Money is earned.
- Some money is for spending.
- Some money is for saving.
- Money can run out, just like hours in a day.
- Money helps us buy and do things.
- Money can help us be generous.
How to Begin Teaching Kids How to Budget
Remember, don’t overcomplicate it! Before your kids ever open their first savings account or swipe a credit card, you can simplify things by exposing them to basics.
#1 Use allowance as a teaching method.
Make it feel real to them! Consider giving your kids a small weekly or monthly allowance (either earned through chores or simply as a teaching tool) to open the door for budgeting practice. Use the “spend, save, give” method with three jars or envelopes. Brainstorm goals together for their money such as buying a new toy they’ve been wanting or donating to a conservation for their favorite animal. This can help them begin to value planning, patience and purpose around money.
#2 Set savings goals together as a family.
When things are done as a family, there’s something special about seeing the progress together! Maybe your teen is saving up for their first car or your little one wants to go to Disney World? Create a tangible savings goal, so they can see budgeting and saving in action! Talk about breaking their goal into smaller goals, and maybe even offer to match their savings to encourage them. You can even create a tracker to place on your fridge for them to see progress on what’s adding up!
#3 Involve them in grocery shopping.
Everyone in your household eats the food, so why not make your kids feel involved in what goes into purchasing it? Not only does this help provide a sense of pride but also instills a real world adult skill they’ll need for life. Next grocery store visit, give your child a specific list of items they are in charge of and a small budget. Walk them through how to check prices, compare different brands and make decisions on what they buy. This can help give firsthand experience on how budgeting shows up in your life.
Creating Practices That Last a Lifetime
You aren’t trying to raise the next CFO or CPA, but helping your kids see money as a tool they respect but don’t necessarily stress over is important. Normalize talking about money, budgeting, spending and saving in a positive way, and you can empower them to grow up managing their money not to just survive but to thrive!
