5 Easy Ways I Teach My Kids About Money

Household Responsibilities

choresI have worked from home since my first son was born, and my kids realize that in order to earn money you have to work for it. They have long been responsible for chores around the house in exchange for chore money.

We utilize a coupon system. For each chore completed without being told, a coupon is added to a chore chart. Each coupon is worth a quarter.

At the end of the week, they are responsible for adding up the coupons and logging the amount on a sheet of paper. Both kids have opted to allow their money to grow on paper until they need it for something.

Related: 18 Great Books That Teach Kids About Money


10 Percent Rule of Savings

10percentWhile we sometimes miss the boat on the 10-percent rule concerning chore money, it does apply to other money they receive for holidays, birthdays, and other monetary gifts.

The kids must calculate 10 percent of what they received and that money will then be put into their savings accounts.

This money continues to be saved and is not specifically earmarked for anything at this time. However, as they get older and their tastes get more expensive, they will be better suited to set financial goals.

Related: Can Kids Invest and Start Saving for Retirement?


Instilling an Entrepreneurial Spirit

entrepreneurialAs an entrepreneur, I fully believe in the value of independent work and creativity.

I encourage the same in my kids. They have been involved in learning about my business as well as that of other small business in the area.

Through this, the kids learn many business skills and can see that life can be more than a 9 to 5 job.

Related: 5 Games That Teach Kids About Money


Comparative Shopping

comparisonMany parents are known to say “it’s too much money” when they deny a child’s request for something new.

My kids are being taught frugality each time we go shopping whether for groceries or other items.

At 10 and 7, they are actually quite good at comparing prices. They are given the opportunity to make decisions when planning to spend money and more often than not, they make the “right” financial decisions that will save them money.

Related: The Best Credit Cards for Groceries


Feeding the Piggy

piggyWe have containers in several areas of our house.  Both boys automatically know that any loose change found goes into these banks.

When we are planning a vacation, they’ll seek out extra change to add and always participate in rolling the coins and taking them to the bank.

Related: The 5 Most Inexpensive Ways to Travel


In Conclusion

kidmoneyEveryone has their own ways of managing money, and it is important to realize that kids absorb a lot of information and will likely follow your lead when it comes to financial issues.

Age-appropriate involvement in family finances gives kids an idea of how things work in the “real world” so it’s important to include them on some level.

When kids get older and anticipate college, they should be well-prepared to handle money on their own for the first time while knowing the skills they need to prevent an accumulation of debt.

Building a strong financial foundation is one of the best lessons parents can teach their child to ensure a much more financially-sound future.

Related: How These 4 Banks Cater to Kid Savers