5 Tips to Teach Money Management for Kids

5 Tips to Teach Money Management for Kids

Parents want to teach their kids about money, but worry they need to know more about finance or learn a certain method to start. In fact, parents teach their kids how to manage money all the time. From planning grocery shopping to swiping a card at the store, kids watch their parents and learn their foundation for money habits early. We’ve gathered our top 5 tips parents can use to easily teach money management for kids and encourage financial independence in everyday life.

Tip #1: Teach kids how to save early

One of the best ways to start teaching money management for kids is with savings. Kids can start learning the value of patience and waiting for something they want at any age. Teach savings skills to kids in stages. Use practical examples and encourage lessons like saving for a special toy or video game. Encourage children to learn more about spending wisely with tools like a kids debit card and Money Missions.

Tip #2: Encourage giving

Many parents want to encourage kindness and a giving spirit. Teaching kids how to help those less fortunate with their money is a great way to help them feel involved in charitable giving. Practice setting aside a certain amount of your child’s allowance or gift money for a charitable cause or using a kids debit card for charitable donations.

Tip #3: Model spending wisely

Kids learn best by watching their parents and teachers. One of the easiest ways to teach money management for kids is to let them watch you practice spending money wisely. Get your child involved in the grocery budget planning and discuss household purchases. The more your child sees good money management skills in action, the easier they can build their own smart money habits.

Tip #4: Show kids how to research their options

As you model wise spending, show your kids how to compare different products and look for sales. Comparing brands and deciding what items are worth buying in bulk are skills your child can use to make wise choices and save money. Comparison shopping will also help them make smart money decisions when it comes to bigger purchases like a car or a home.

Tip #5: Teach kids about credit

While young children aren’t ready to learn about interest rates and car loans, they can begin learning how credit works. Help kids understand that credit isn’t free money and must be paid back over time. Kids can learn the importance of saving up to make a purchase and the responsibility of paying back a debt. As your child builds money management skills, they can practice handling their own money and kids debit card. Like 15-year-old Ella says, “I feel like I'm completely financially independent now. It's so liberating having my own money and getting to see it and check it out. I love it!"

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Written by Kristin Yarbrough Published Aug 5, 2022 ● 2 min. read