Teaching Money Management

Benjamin Franklin has a wonderful saying, "An investment in knowledge pays the best interest." There are so many things that some parents think that their child will just "learn" or "pick up" as they grow. I think that there are many things that we should be teaching our children, but just never think of them. Money management is definitely one of those things, and who doesn't want to teach their child how to manage money well?

When should I start teaching my child how to manage their own money? 

How do I go about teaching them? 

If you have ever asked yourself either of these questions, then the following tips might be of interest to you. 😉

Here are some of the systems that my husband and I use. Our children have access to their own money around age 3 or 4. And right away, we begin having intentional conversations with them anytime an option or ability arises for them to buy something. So far, I am pretty proud of how they manage their own money, and slightly surprised because they are so young. 

1. Teaching some detachment from material things. 

   This one strikes me as kind of funny. Teach kids not to want anything and they won't buy anything.😂

   
   

   Seriously though, we find this topic very important. Every so often, we will declutter our kids' rooms and make sure they help us do it. Are there things that they do not want or use anymore? Are there things they want to send to goodwill so that someone else will be able to use them? Ask your child questions. Why do they want to buy something? Is it a good use of money? 

   
   

2. Give the child a good place to keep their money. 

   Our children do have their own bank accounts. However, we use bank bags for some of the birthday and Christmas money that our children accumulate. When we go out, and our children have an opportunity to buy something, they can take their own money bag with them. This creates such a great sense of independence and accountability. Plus, you can also have your child check out at the store themselves, of course, with you nearby, but this is a great maturing and confidence-building opportunity. 

   
   

3. No allowance.

   Allowance for children is a frequently talked about topic. It seems that sometimes there can be social pressure behind it as well. But, here are two of the reasons that it is not given in our house. 

   
   

   1. No allowance creates incentive for creative thinking. For example, my 5-year-old will draw pictures and try to sell them. My 6-year-old is always trying to figure out ways to make more money, and this motivates her to improve her skills and talents. 

      
      

   2. Real life does not pay you to complete your personal responsibilities. Chores around the house should be done out of respect for others, care for our environment and also to build discipline and good responsibility. 

      
      

4. At times, have the child take time to think before they make a purchase. 

   There have been times when we have told our children that they cannot buy something because we did not think that it was a very wise purchase. Delaying gratification is a wonderful virtue to teach and a habit that children should be taught. Have your child take time to really think about whether they want the toy. Tell them that you can return to the store next week or next month if they decide they really want it. 

   
   

   What has this produced in my children? I noticed that they began to really be critical about whether a product was worth the money. Over time, they loved the idea of saving their money more than blowing it whenever they had an option. 

So, there you go! That is my short bit of advice on the topic. As always, I love the idea of helping our little human beings grow into awesome human beings with the potential to have an incredible future.