7 Tips for Teaching Kids about Money
At The Wren Centre, we know what our strengths are - supporting kids, teens, adults and families in Ottawa through therapy! We hire expert support when we need it, including our awesome accountant, Erica Hemsworth, from The Number Works. Here’s Erica’s financial advice for helping your kids have a healthy relationship with money:
Teaching kids about finances is one of the most valuable life skills you can impart, but money is often an emotional issue for many parents. However, there’s a phenomenon called the “mentor effect” where teaching and mentoring someone else helps the mentor up-level their own skillfulness. Teaching your kids about money is good for you and them! Understanding money management early can set them up for a lifetime of financial success. Here are some tips to help you introduce your children to the world of finance in a fun and engaging way:
Explain what money is and how it’s used. Use real coins and notes to make it tangible. Teach them the difference between things they need and things they want. Use everyday examples to illustrate this concept.
Take them grocery shopping and explain how to compare prices and budget. Let them help with making choices within a set budget. Give them a small allowance and help them decide how to save, spend, and share it.
Start with a piggy bank for younger kids. Encourage them to save a portion of their allowance or money they receive as gifts. For older kids, open a savings account and show them how to monitor their balance and interest earned.
Help them set small, achievable savings goals, like buying a toy. This teaches the value of delayed gratification. Discuss larger goals, such as saving for a big purchase or future education.
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5. Create a basic budget with their allowance. Show them how to allocate money for savings, spending, and sharing. Encourage them to keep track of their spending to understand where their money goes.
6. Use board games like Monopoly or online financial games to teach money management in an entertaining way. Explore kid-friendly financial apps that teach money concepts through interactive activities.
7. Demonstrate good financial habits in your own life. Kids learn a lot by observing their parents. Discuss family budgeting and saving goals. Show them how you make financial decisions.
Teaching kids about finances doesn’t have to be daunting. By incorporating these tips into everyday activities, you can help your children build a strong foundation for financial literacy. Start early, be patient, and watch them grow into financially savvy adults.
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CEO and Founder of The Number Works, Erica Hemsworth, is a CPA, CMA with a passion for process, efficiency, simplicity and helping small businesses succeed.
