Money is going to be a part of your kid’s lives forever, and learning how to properly use, manage, and allocate money is a skill that is learned. No one comes out of the womb with an innate ability to handle money well. It is through learning, trial and error, and example that kids become good at financial management.
Here are a few ways to teach kids about money:
Through games: There are a number of games that can help children learn about money. You can have them set up a store, with treats, and fake money, and they have to buy the items they want. There are premade games designed specifically to teach kids about money, piggy banks, and coin counters. Buying a few of these toys, and encouraging your child to play with them will help them to become familiarized with money early, and grasp the value of it. The earlier you start, the better. So, find games online, or at stores that teach kids about money. Monopoly is a great family game that requires money management, and can help kids learn. These do not have to be serious experiences, just exposure to money and its management. The more they get, the better they will become.
Through real life experience: A fabulous way to teach kids about money is to give them the opportunity for real life experiences with it. Give your children a weekly allowance, even if it is small, and allow them to figure out how they will stretch it, and make it work for the things they want and need. Many parents will just buy their children toys, treats, etc. when they want them, and because of this, kids tend to feel entitled, and like money grows on trees. If you want them to learn that it is not as disposable as they thing, give them some of their own, and let them make their own purchases. You will find that they take better care of the things they buy, and are more careful with their wants when they have to fund them themselves.
Through example: Of course, the absolute best way to teach kids about money is through example. Do not hide your financial situation or the way you handle your finances from your children. Involve them with creating your family budget, and let them see you paying bills, and allocating funds. Help them understand that life is not FREE, and that you pay for every item you have. If they see you utilizing money well, they will learn it too. They may also learn from your mistakes. If, for example, you get in over your head, and lose your home because of it, do not hide that from your children. Explain to them that you bit off more than you could chew, got in too deep of debt, and did not have the finances to support your lifestyle, and as a result you lost your home. This may motivate them to be wiser with their money.