You can teach money skills to children, while learning yourself.

You are here to learn to teach money skills to your child. If you learn how to manage your money, then you can teach a child how to manage money too.

There are specific steps to success in show children learn about money, then learn how to manage money.

These are the first steps to teaching about money. It sets up the techniques of money management. It is in layman terms and understandable by all.

Watch our next pages too for more skills to teach about children and money.

How to introduce children to money At what age are you comfortable letting a child have money and not try to eat it? If your child understands that concept, you are ready to start. You can purchase at any dollar store or our related source link to find play currency. Buy the set with pennies, nickels, dime, quarters, and dollar bills. Later on you can upgrade with another set which includes Dollar, Five, Ten, and Twenty Bills. Homeschool families are very familiar with this concept, and have learned to add math class using them. It all starts with teaching them to add and subtract using the coins first, then moving up in increments as you introduce new concepts and skills.

Child's first allowance. Remembering that children's' "play" is their work; we have to let them earn at a young age to earn their money doing "fun chores" mixed with a slice or your chores added into it. Assign them to wash just the plastic cups or spoons after you are done with your share one day. Give them an allowance with their play money, and have them put it in a bank of their own. This bank must be accessible by you and the child only, so there is a sense of ownership. This makes them proud and excited about saving.

Responsible spending and what kids know about money. Our children grow up going with us on our errands to the grocery, gas station, local Super marts, and everywhere else we spend money. They know more about money then you give them credit for. The next time you go ask them on the ride home if they understood what just happened, and where the money came from. Expound all you had to do to have that money, and where it came from. The old saying, "Actions speak louder than words." applies here. If your money management skills not prioritized and your budget...basically doesn't exist, that is what you are showing them to be as an adult. You are setting yourself and them up for failures along the way. You can change all this, and you can learn together, how to budget, how to save, how to get and build credit, how to buy frugally, and how to stay out debt. When you are an informed spender, you will pass on that knowledge, and instructions to teach your children money management.

Setting Allowances amounts. When you start kids out with play money, they have now progressed to the real, and you are ready to set real money allowance amounts. You will start with small increments such as a four year old getting a dime for each chore that was assigned for that day. If they have ten chores per week, they have earned a Dollar that week. Now, put it into their account, and tell them you have an account too. Again that is repetition of skills, they learn to take control of their own money and have ownership of it. They now know their limits, but also get curious about how to increase it. By the time our kids get to their teens, you have graduated them up at a reasonable rate, and many parents will pay approximately minimum wage for actual time spent doing each chore. They will also be deducting (in many households) for chores the parent had to do for them. This shows both sides to being responsible and earning an income in the future. Show them you are doing the same thing. Show them you are spending your money wisely, and saving a portion. You will instill in them, the money management skills that will help them become a good money manager in adulthood.

Teach kids about savings accounts. Even at a very young age, children will enjoy saving "their money" so they can buy something important to them. We have to teach them responsible saving and buying. It is our responsibility as parents to teach them budgeting, money management, how to be frugal and looking for the best product for the buck, but most of all Saving.
As we said previously, the ownership of the money is very important in this process, so please set up the Re-Loadable Savings Card told you about. This will also know that "their money" is safe, while you know you control their spending limits on it. It keeps it locked away so to speak, and saved-with responsible spending attached.
Once the spending limit is set, and you see that they are making good decisions in spending, you can adjust it with them. Remember, always praise the good decisions they make. At the end of the year, I always give my kids a Bonus (around Thanksgiving) and begin teaching Seasonal Spending. We will expound on that later.

Watch this family and the methods they have used over the last 12 years to teach kids to save money. Watch video here to open in a new window.



I prefer having my children's money on our card over the cash in box system they use. However, each family will develop their own methods and techniques that work for them, but each successful savers will have followed the steps above or on the next pages.