It’s important to educate your kids (and grandkids!) on how money works and what it means to earn, save, spend, and budget. Sometimes, though, it can be difficult to know how and when to get these conversations started. If your child or grandchild is old enough to ask for a new toy, it’s probably a good time to start explaining how the world of money works, even in broad terms.
Here are a few ways you can begin talking to your kids about smart money habits:
When you’re running errands
When you’re out and about, getting gas, grabbing groceries, or shopping for new clothes, you have a perfect opportunity to explain things like prices, the difference between needs and wants, and the benefits of coupons or other deals. Make it a game and keep a list in the car – show them everything you spent together that day and how it all added up. Then you can explain how your pay is budgeted for things like housing costs and food, and some money is also set aside for future expenses like college tuition.
When you’re at the bank
If you like to do your banking in person, bring your child or grandchild along with you for a field trip. Show them how transactions work, and ask the manager to explain how the bank operates and what happens at an ATM. This is a great learning opportunity for your child to see in real life what’s going on at the bank.
Chores and allowances
This is the perfect way to illustrate how money can be earned through hard work. Share tips you might have for dividing up allowance in different budgeting buckets like spending, saving, and giving. Teach your kids about financial goals and encourage them to track what they’re earning and spending in a special notebook. Once they have enough cash accumulated, you can even help your child open a savings account at the bank.
Ideally, when you introduce how money works during these kinds of everyday moments, your child will respond with lots of questions. Encourage curiosity and if you don’t know the answer to their question, do some research together or ask your local banker the next time you stop in.