How to Teach Your Kids About Money

January 27th, 2012 Kids Organizing

As parents, we can sow the seeds to help our children learn many lessons that will carry them through life. I’d be remiss if I didn’t mention organizing, but today I want to talk about MONEY! I didn’t really have many lessons about money growing up, the only one that really stands out in my mind is a conversation with my dad when I was a teenager. I remember my dad talking to me about setting up a budget and to remember to account for gifts that I would need to buy for people that month. Well, as it turns out, there’s a whole lot more to learn than that and I had to learn by good example from others and by reading books on the topic.

Not everyone will agree with me on this one, but with my kids, I haven’t tied allowance to chores. I took a parenting class many moons ago, and the instructor felt that chores should be expected as part of living in the home together and teaching kids about money should be a separate issue. So, I went with that.

These are the steps I took to teach my own kids about money:

I gave them 3 piggy banks: One for savings, one for spending and one for charity.
I gave them a set amount of cash each month that could be divided into each piggy bank. If they received $20, then $9 would be to spend, $9 would be to save and $2 would be for charity.
My kids could pull from charity whenever a need arose that pulled at their heartstrings.
When they received a gift of money, they had to save half and could spend the other half how they wanted to. As they’ve gotten older, the percentages have shifted.
We opened savings accounts that earned interest for the portions that they had to save.
Now that they are older, they receive pre-loaded debit cards for school clothes and they have to make the most of it by looking for good deals and even through thrift store shopping.
When they each received $1000 from a family member, they were allowed to spend $100 and then took $900 to a financial planner to invest in mutual funds. They could really make this money work in their favor if they just let it grow. Every other month they add a contribution.

Don’t overlook the opportunity to teach your kids how to be wise with their money at a young age. Even if they go broke in their 20′s by running credit cards sky high, at least you will know that you did what you could when you could.

To make sure I cover all my bases today, here are some bedroom organizing tips to help your kids too!