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7 Simple Money Lessons Every Kid Needs to Learn

September 21, 2017 by Wifeeclectic 19 Comments

“This post is part of a social shopper marketing insight campaign with Pollinate Media Group® and Greenlight, but all my opinions are my own. #pmedia #GreenPMG  http://my-disclosur.es/OBsstV”

When my daughter was six or so, she brought a toy to me to fix. When I couldn’t fix it, she told me it didn’t matter; I could just buy a new one. That was the moment I knew it was time to teach our child how to manage her money.

To her, having money was a given instead of something she needed to work for. We immediately gave her an allowance she had to earn and began teaching her how to save and spend appropriately. Over the last couple of years we have hit a few bumps in the road, but for the most part I have been really proud of our daughter and her saving habits.  There are 7 main areas we have focused on in teaching our daughter about money.

These 7 principles will help set your child up for financial literacy:

1. Learn how to budget

As soon as your kids start earning their own money, they need to start budgeting too. The biggest part of budgeting is assigning a place for every single penny that comes into their account. That place can be a fun money account, but it needs a place. For our kids, their money looks something like this:

  • 10 percent goes in long-term savings
  • 10 percent goes in charitable giving
  • the rest is fun money.

As they get older, or have specific wants, you can change that budget around. When my daughter wants to start saving up for something like a bike, we usually split her fun money in half and add half to short-term savings. This doesn’t replace her long-term savings or draw from it. This simply helps her save more for something she wants soon.

2. Properly manage credit and debit cards

Nowadays, there is no escaping plastic currency. It is so much better to embrace it and teach your child how to correctly use it than shun it and turn your kids lose when they are 18. I remember once in college I applied for a credit card because they gave me a free dinner. Yikes!

Greenlight, the smart debit card for kids, is the perfect way to introduce your child to debit cards, budgeting, and money management. The Greenlight Card and App truly lets your child take the wheel when it comes to their money, but places you in the passenger seat to help guide them on how to properly use their card. The Greenlight Card is controlled by apps on both you and your child’s phone/device. Parents can safely add money to their child’s account from their choice of funding source. Parents can also place limits on how much a child can spend in a certain store, or types of retailer. This gives kids the little nudges they need to keep them on track. Kids will love the automated allowance feature — ‘set it and forget it’ — so your kids always receive their allowance on time, with no fees for mom and dad.

With the Greenlight App your child can request money and send you messages all within the app. When your child has a request, makes a purchase, or sends a messages you’ll receive an notification of all activity.

The Greenlight Card enables you to approve specific stores where your kids can spend money. Simply search for a specific store within the app and add money to your child’s card instantly. Don’t want to set restrictions? Add money via the “Spend Anywhere” Greenlight and your child can spend that money where they see fit. You and your child will receive real-time notifications after each purchase.

Worried your child is going to lose the card? Don’t be! You can easily turn the card off at any time!

The Greenlight Card is available for both Android and iOS and costs just $4.99/mo per family, which includes cards for up to 5 children. From now until October 30, take advantage of a special 30-day trial to see if the Greenlight card is a good fit for your family and get a $20 deposit bonus* when you sign up after the trial.

*deposit bonus made approximately two weeks after free trial ends

The Greenlight Card is truly the easiest way to teach your child about debit cards and keeping to their budget!

3. Emphasize the difference between wants vs. needs

This is an incredibly important lesson to teach your children early on. Have them write a list of everything they use in the day — from their bed to their clothes to the video games they play after school. Have them place each item in either a want column or the need column. Let them know that wants are important too, but they can only be taken care of after the items in the need column are met, which includes saving.

A good way to practice this is to take your child grocery shopping with you. As you place items in the cart, have them tell you which column each item belongs to (want or need). For instance, bread, milk and eggs are all needs, while cookies are a want. It helps them recognize the things they can go without if they have to.

4. Educate your child on taxes

Taxes can be a hard concept to understand. If your child wants something that costs $10, they expect it to cost $10. Teaching the concept of sales tax is very important to helping them understand how far their dollar can actually go, and that they need to leave money in their budget to account for tax.

5. Money isn’t free; it comes from hard work

There is no money tree handing you and your partner your pay check every week, so don’t be the money tree for your kids either. Set expectations based on your child’s age and abilities. As your child matures, expect more from them and adjust their allowance accordingly. The more work — and the more challenging work — they do, the more their allowance increases. In our house, we have baseline chores, which are a set of chores each child has to complete before they can do extra chores that earn them allowance. We want our kids to know some work is just part of life. For instance, we don’t pay our kids to clean their room, do their homework, or practice the piano. Those things must be done before they can earn money.

6. Compare prices to get the best value

A really valuable thing you can teach your child is how to stretch their dollar. Sometimes you can afford to buy more of what you want by being careful when you buy what you need. Is the store brand of something 50 cents cheaper? That is 50 cents you have saved! Teach your child to watch the price labels at the store for prices per ounce so they know which size and brand is really giving them the best value when it comes to food. Teach them to look at other brands and colors for a better deal.

This is also a great way to teach your child about brands. Some brands are a better value because they provide higher quality, and are therefore worth a higher price. Sometimes generic items work just as well and can save money. Of course, this is sometimes a subjective value judgment, but that’s where your wisdom and experience can come in handy. How many brands do you use mostly because your parents used them? Helping your child understand brands can save them money and avoid falling for clever marketing ploys.

7. Hard work should be rewarded

If my kids have already earned their allowance for the week, I will create a list of extra jobs they can do and earn some extra money. These are often more difficult jobs, such as deep cleaning my car or cleaning out the garage. The lesson? If they’re willing to work hard, I’m willing to pay them for it.

A combination of these 7 ideas will make sure your child is on the right path to understanding their own finances. What money lessons have you taught your children?

Filed Under: Education, Parenting Tagged With: Parenting, Saving Money

Reader Interactions

Comments

  1. robin rue says

    September 25, 2017 at 3:15 am

    These are important lessons, but I think high school is the appropriate age for my kids to start learning about things like credit cards and taxes 🙂

    Reply
  2. candy says

    September 25, 2017 at 5:17 am

    We always taught our children how to budget and the difference between wants and needs. Of course when they are young you have to continue teaching and reteaching but they will finally understand.

    Reply
  3. Alli Smith says

    September 25, 2017 at 6:58 am

    Every kid needs these seven simple lessons. It will help them avoid financial pitfalls and teach them to handle money responsibly.

    Reply
  4. Jenn @ EngineerMommy says

    September 25, 2017 at 7:08 am

    Kids don’t learn enough about money in school. I love that these lessons are appropriate for kids of many ages. I will be using some of these with my kids.

    Reply
  5. Sarah L Bailey says

    September 25, 2017 at 7:35 am

    These are some great tips, I really do believe you learn a lot of your money management when you are a child, taking after how you see your parents spend.

    Reply
  6. Jeanette says

    September 25, 2017 at 7:49 am

    This is definitely something that we are teaching your child. He wanted an iPad and we made him soup for it it took a long time but he was very excited when he finally got it. We put 10% away in the savings and 10% into tithing. Christmas time the tithing turns into a fun way for him to give to others.

    Reply
  7. Emily says

    September 25, 2017 at 11:31 am

    This is great information! We have a savings account for the kids that they put money into, but I know we could improve teaching them smart ways to handle money. I was not aware there is a credit card perfect for kids. I will have to look into this, thanks!

    Reply
  8. Julee Morrison says

    September 25, 2017 at 12:47 pm

    I love these tips because they are important. This looks like a great option for when my daughter travels with her volleyball and soccer team. I could easily add money if they were stopping somewhere more expensive for dinner, or for another teammate who maybe didn’t have the money to buy dinner. There are possibilities here.

    Reply
  9. Lisa says

    September 25, 2017 at 1:56 pm

    These are good tips. We have a savings structure set up the same way. But the savings goes into a shaving account with an attached debit card. It lets them learn how to balance the account.

    Reply
  10. Anosa says

    September 25, 2017 at 2:18 pm

    I think these lessons should definitely taught early on both at home and at school, some of us learnt about money and savings the hard way round

    Reply
  11. Cheryl says

    September 25, 2017 at 2:42 pm

    I’ve drilled budgeting and saving into my son since he was little. It’s interesting teaching him how to reconcile his account because it’s all online since we don’t really use checkbooks anymore.

    Reply
  12. Liz Mays says

    September 25, 2017 at 6:47 pm

    The Greenlight card is such a good idea. Establishing good money habits in a safe way is going to help them so much!

    Reply
  13. Christy Maurer says

    September 25, 2017 at 7:27 pm

    This really is a great idea for kids. It is crazy to wait until they’re in college to try to teach them to manage their money. Love these easy lessons for the little ones.

    Reply
  14. Sandy N Vyjay says

    September 25, 2017 at 8:59 pm

    Children need to learn the value of money as early as possible. Always helps to prepare them for the future. These are some really practical and sensible tips.

    Reply
  15. Pinay Mommy Online says

    September 26, 2017 at 5:26 am

    All of it is an important lesson for them. I’m glad that I taught my all three of my kids about the value of money, now my eldest regularly save money and doesn’t spend only when needed or necessary making my two younger kids follow suit.

    Reply
  16. Dogvills says

    September 26, 2017 at 3:07 pm

    I always believed in the power of piggy banks. Seriously, when my kids were young and they wanted something, I gave them a piggy bank and told them, “Save for it” Worked every single time. Thanks for your tips. Sharing this with my sister too.

    Reply
  17. Jaime Nicole says

    September 26, 2017 at 7:05 pm

    Budgeting is such an important skill to teach kids. My older daughter HATES spending money but my youngest is going to need advanced budget training lol!

    Reply
  18. Nikka Shae says

    September 26, 2017 at 10:48 pm

    Now I like this idea! I just might have to try out the Green Card for my teenager le.

    Reply
  19. Chubskulit Rose says

    September 27, 2017 at 11:31 am

    We reward our kids for every chores that they do around the house and they are now starting to realize how important it is to spend wisely on the money they earned.

    Reply

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Debra Hawkins - Housewife EclecticHi, I'm Debra. I am a craftaholic photographer married to a web-programming amateur chef with two sassy littles keeping it interesting. It gets crazy around here. Read More…

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