In our house we use three labeled piggy banks to build a foundation and serve a specific purpose – GIVE, SAVE and SPEND.
We use a clear colored jar to save – so they see the money growing. For younger children having the banks color coded is great if they can’t read yet. Establish a system of what the GIVE bank is for with donating time and money, SAVE for college or items to purchase with a need and SPEND to save up for a toy, candy or other wanted purchase. Yesterday, they had a dollar bill and five dimes. Today, they have a dollar bill, five dimes and a quarter. Talk through this with them and make a big deal about it!
Set an Example
Little eyes are watching you. If you are slapping down plastic every time you go out to dinner or to the grocery store, they will eventually notice. If, at the end of every month, you and your spouse are arguing about money, they’ll notice. Set a healthy example for them, and they’ll be much more likely to follow it when they get older.
Show them that stuff costs money. You’ve got to do more than just say, “That pack of toy cars costs $5, son.” Help them grab a few dollars out of the jar, take it with them to the store, and physically hand the money to the cashier. This simple action will do more than just a five-minute lecture.
Talking About Money
It’s going to take an investment of time on your part, and it won’t always be easy, but if you want your children to understand how to successfully manage their money when they get older, following these guidelines will be completely worth it.
If you don’t teach your kids how to manage money, somebody else will. And that’s not a risk you want to take.
Teach your kids how to handle money now, and they won’t end up with money regrets later on in life. You can give them the head start you wish you’d had and your kids will love it!
Click the image to download our “Raising Money-Smart Kids” article.