3 Simple Money Management Tips for Kids
By Deborah Sweeney on January 25, 2013
As the CEO of my own company and the mother of two sons, I’m conscious when it comes to finances and I like to keep my boys just as well informed about money as their mom is. Teaching children about money is often seen as a chore to do or worse, an area that either gets cut off far too late to have a thoughtful discussion about. Whether they’re in grade school or about to hit middle school, the time to teach kids great money management skills is now and with my three tips, it’s made simple!
1) Only Spend What You Have
Avoid asking for a “raise” or an advance on an allowance and encourage kids to spend what they have. If the kids earn money making lemonade at a lemonade stand or holding a car wash, they should be able to save some of that money and spend some, but only what they’ve made. This will work to aid children in the long run, especially when it comes to getting credit cards later on down the line.
2) There’s No Need to Save It All
Kids don’t need to Scrooge McDuck their way through life, counting every penny made and swimming through their piles of wadded up five and ten dollar bills. It’s also tough to do – these are kids we’re talking about! No need to pile on the expectation that they don’t go to town every now and then with what money they’ve made, but it’s also important to point out that there is no need to spend every dollar they get either.
3) Spend Wisely
One of the biggest money management skills kids need to know early on is how to differentiate between needs and wants. Needs are necessary and typically they’re fairly minimal whereas wants are endless in scope. Spend wisely and within your means. If you don’t have the money for something and you don’t need it, then don’t buy it. By avoiding spending money on wants, kids may not be able to get the most popular toys that everyone else has, but by saving hard earned money to buy what they need, they’ll grow to appreciate it even more because they worked hard to get it and use it for a long time to come.