5 Simple Steps To Teaching Kids About Money

Published: Jan. 11, 2017, 10:02 p.m.

b'Healthy money habits to teach your kids
It\\u2019s never too early to start teaching your children healthy habits and that includes financial ones. From an early age, children begin to observe their parents in all areas of life, including their spending and saving and how they talk about money. Kids pick up on our attitudes about money just by watching us. So grab this opportunity to inculcate healthy financial habits at a young age and help your kids become financially wise adults. Teaching kids about money is probably not as hard as you think, for them or for you\\u2014just use your everyday experiences with them to instill financial awareness. The first two money habits I plan to talk about can apply to very young children, while the last three are probably best with children aged 8 and up.

* Model good financial behavior

Children watch their parents and replicate many of their habits. So take a second and think about your \\u201cmoney behavior\\u201d when your children are around and reflect on what you think they may be learning from you about money.
Are you mindful of your spending around your children? Are you and your partner always getting the newest gadgets, cars, or items for the house? Do you eat out a lot as a family? If you\\u2019ve answered yes to one or both of those questions, your children are likely to develop an \\u201cI want it, I can have it\\u201d financial attitude, which could lead to some pretty painful financial mistakes, mistakes like racking up heavy credit card bills to satisfy their need for instant gratification.\\xa0 Clearly, this is the wrong approach\\u2014misleading by example, you might say\\u2014to teaching kids about money.\\xa0 Instead, practice shopping on a budget, using coupons at the grocery store, and making home-cooked meals early on. Even if your children are young, they notice these things and will learn to value money. In fact, I, for one, am a big fan of value-for-money in a lot of my purchasing and spending decisions, such as, for example, buying high quality food even at a higher cost and cooking nutritious meals at home instead of going out for less healthy and more expensive dining options.

* Make them wait to buy things they want

Learning how to delay gratification is a much-needed skill in today\\u2019s \\u201chave it now\\u201d society. Teach your children that when they go to the store with you, they don\\u2019t always get to leave with something. If they can\\u2019t stop talking about that new toy they want, tell them they can ask for it for their birthday or Christmas or let them earn money by helping out with chores around the house.
Through this, kids will learn \\u201cdiscipline with spending\\u201d, and that they don\\u2019t always get to buy something when they want it. Once they start bringing home their own paychecks, this delayed gratification will help them stretch their paychecks through the month.
The two points I just spoke about are money habits you should start practicing from the day your child is born. The next three are perhaps better saved until your kids are about eight years old and have a clearer sense of the world around them.

* Kids savings accounts: teach them to save for the long-term

Kids savings accounts are a smart way to get them involved with managing money at a young age.\\xa0 One of the best approaches to teaching kids about money and saving is with the \\u201crule of thirds.\\u201d When your children get an allowance or money for their birthday, have them put one-third into a long-term savings account like a 529 college savings account and one-third into a savings account for a bigger purchase like a bike or an iPhone\\u2014something expensive that they really want. For the final third, give them the option of doing what they wish with it; let them spend it immediately if they want or let them, of their own volition, stash part of the last third into additional savings.
Moreover, to reinforce this and to introduce them to day-to-day financial transactio...'