10 Easy Ways to Teach Your Kids About Finance


Piggy bank

Perhaps the most widespread way to teach kids how to save money is by giving them a piggy bank. A popular gift for children, piggy banks can easily be used by parents to teach their kids personal finance. Have your child fill up the piggy bank with coins and continue until it’s full. Ask your child what they’re saving for -- their goal -- and encourage him or her to keep filling the piggy with money. Slowly, the concept of saving to buy something will seep into your child’s brain.

Alternatively, you can get a more modern piggy bank with multiple slots, like save or donate, to teach your kids that money isn’t just for buying things.

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In this digital age, there are hundreds of videos at your disposal to teach your kids the importance of saving money. The “Sesame Street” video “For Me, for You, for Later” -- which features Elmo -- is one example. There are tons out there to keep your child occupied. He or she might not even notice the educational value behind the video, but they will help reinforce and teach important money lessons in a fun and easy way.

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TV shows and movies

If going to the movies or watching TV are things your son or daughter like to do, use these entertainment platforms as a vehicle to discuss finance. Money often plays a significant role in the plotlines of films and television programs.

For instance, Homer often makes silly choices with his money in “The Simpsons.” Identify potential money lessons you can point out to your son or daughter while watching a film or TV show with them -- and once it’s over have a short discussion.

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Board games

Board games like Life and Monopoly can provide endless hours of entertainment and impart important financial lessons. While playing these games, depart some wisdom to your son or daughter.

For instance, in Life, players can choose whether or not to have a house, children or purchase car insurance. These decisions can end up being costly if the player lands on the wrong space. Use that as an opening to discuss the impact of these decisions.

Similarly, Monopoly teaches you that you should buy a blend of properties -- an easy opening to discuss diversification with your kids and why they shouldn’t put all their eggs in one basket. You can talk about planning for investments wisely, budgeting, and any number of financial lessons.

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Video or computer games

Unsurprisingly, kids love to play video and computer games. Use that to you advantage by having your son or daughter play educational video games, like “The Great Piggy Bank Adventure” by T. Rowe Price and Disney or “Animal Crossing,” a simulation game developed by Disney where players can collect objects and sell them. Something as innocuous as “Budget Hero,” which challenges kids to balance the federal budget, can be effective tools to educate.

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Once your child understands the basics of money, make him or her work to earn some cash. Don’t just give your kids money automatically!

Decide how much you want to give your child and then have him or her complete a list of chores in order to get paid. This is an effective way to teach your kids about the value of money.

The monetary amount isn’t so important -- though you might want your son or daughter to choose a goal that’s attainable -- the lessons that you will teach your child about saving are though. You can even go one step further and “charge” your son or daughter for utilities to teach them that money isn’t free.

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Since you’re likely to spend a bunch of your time shopping for groceries, include your child on the fun. Give him or her a few bucks to purchase something.

If your kid chooses something that’s too expensive, explain why he or she can’t purchase something out of the budget. You’ll be teaching your son or daughter an important lesson about making choices on how to spend money.

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Teaching by example

Nothing may be more powerful than teaching through your own example. Maybe you have a savings jar that you use to collect loose change that you eventually cash in for something fun. Maybe you talk about why you skipped out on going to a restaurant one night. Maybe you take your kid with you to the bank and explain what you’re doing. Or bring him or her to your workplace.

Whatever lessons you’re teaching, explain your decisions to your son or daughter and the financial impact they might have.

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Starting or helping with a business

Having your child set up a lemonade stand or sell cookies and candy can be a great way to teach him or her key business principles. Obviously, they’ll earn money from what they’re selling.

But maybe you take a few dollars for helping them make their goods or setting up on your driveway. Maybe you tell your kid that you’ll match whatever they earn.

There are a ton of lessons you can teach your kid by having them sell something.

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Use resources from the web

The web has a vast number of resources that you can use to teach your child all about money. From Kids.gov, which has videos, quizzes, and comics, to Investor.gov, where you can teach your kid about how to calculate compound interest -- there is no shortage of sites u can utilize to teach your son and daughter financial lessons.

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