Our children learn how to read and write in school, but teaching them about money is on you. Kids as early as age 3 can understand the basic concepts of spending and saving. Here are some fun ways to teach them how to be financially savvy.
#1 The dime challenge
How much do you think you’ll save by filling up a two-liter soda bottles with dimes? Depending on how the coins fall into the bottle, you should end up with between $500 and $700. It’s a fun way to teach them about the value of coins and shows them how to set goals and save for something special. In our family, we’re saving dimes for Disney World.
#2 Give them interest payments on their savings
To encourage your kids to keep their allowance in their piggy banks – instead of spending at least $20 on the latest Lego set – give them interest on what they’re saving. A maximum of 5% should suffice, if you can afford it. Not only will this teach your children the concept of earning interest, but it will encourage them to control their impulses to spend.
#3 Use cooking to teach them how to shop on a budget
Planning meals and shopping for ingredients at a grocery store is a hands-on way to talk to your kids about how to shop smart and eat healthy. When you’re in the store, make it a game to see who can find the best prices for the items on your list.
On the nights you treat yourselves by dining out, make it a point to compare the prices of the dishes on the menu to remind them of how much it can save to eat at home.
#4 Have a no-money day
Get everyone to find fun ways to spend the entire day without spending a penny. For meals, find online recipes based on what you already have in your pantry, and for family activities, look for free events in your neighborhood. Most communities have online forums or Facebook groups with local events, so bookmark your favorite sites or subscribe to them for the latest.
#5 Clear the clutter
Research has found that kids who have fewer toys exhibit more creativity, take better care of their belongings, and enjoy reading and writing more than kids who have too many things to play with. So sell or donate toys they don’t play with anymore. It teaches them how to let go and encourage them to find ways to entertain themselves with less.
If you have doting grandparents who love bringing over new knick-knacks, try this to discourage them: whenever they bring over a new toy, pack a bag of older toys and ask them to store it in their home.
#6 Read with them about money
As soon as your kids can count, you can start teaching them about the value of money. One of our family’s favorite books about counting coins is “A Dollar for Penny” by Julie Glass. And we’re teaching our toddler son about spending and saving with “Rock, Brock and the Savings Shock” by former FDIC chair Sheila Bair. Some good reads for elementary school students are “Dr. Seuss’ One Cent, Two Cents, Old Cent, New Cent” and “How to turn $100 into $1,000,000.”
What are some ways you’re teaching your kids how to save? Using the hashtag #WAYSTOSAVE, share them with us on Twitter, Facebook, or email them to us and we’ll feature some of your best tips at the end of the month and share them with our viewers.