Teaching Your Kids Basic Money Skills

You want your kids to grow up into responsible adults. One way to help ensure that they do is to teach them as young as possible about money. Money is a topic that will greatly affect them all their lives, so you want them to have a good, solid foundation.

First, start off by identifying money with small children. They will be taught in first grade about the various coins and their denominations. But you can start at home by getting out some coins and teaching the values early on. You can start early by putting a set amount of money that you received as baby gifts into savings for your child to see later.

Did you know that the only bills that circulate today are the $1, $2, $5, $10, $20, $50 and $100? Any bills higher in value than $100 stopped being distributed in 1969!

Once your child has mastered the amounts of the coins, they are old enough to start learning about saving and spending. When you go to the grocery store, bring cash. Have them help you figure out how much money to give the clerk. If they only see you using plastic, they’ll have a harder time catching on that bills and coins have value.

Teach your children at home by playing money games. Get a set of play money from the dollar store or discount store and ask them how many ways they can think of to make a dollar, and so on. Then, set up a play store where you have labeled food cans and boxes with price tags. Have them buy the food with their play money as they would at the grocery store. Let them be the cashier, too, so they have to make change.

Image by woodleywonderworks on FlickrWhen older kids need to learn about saving and spending, start by giving them an allowance. Make it a small enough amount so that it matches their age. No four year old needs $20 each week. Start too high and you’ll be handing over $100 bills by the time they reach 12! A few coins are enough for a preschooler who helps around the house. A ten dollar bill is enough for a tween who is extra helpful.

Assign monetary values to chores and write them on a chart. Gather the kids and tell them that they can sign up for tasks and be paid once they have successfully completed them. For the little ones, sweeping the kitchen with their kiddy broom can count as a 10 cent task. Helping feed the cat might be a 25 cent task.

As kids get older, ask them if they want to work for even more money for the neighbors or extended family. You’ll be helping out your neighbors and your teen can earn some money, too. Help him set up a snow shoveling business and teach him to responsibly get out there and shovel for his regular customers each time it snows.

A teen who can drive can do your grocery shopping or run errands for you for a set fee. You may feel that you shouldn’t have to pay your kids to help out, but what you are really doing is showing them how the real world operates. They will have to work for a pay check someday, so best that they start learning how to work now.