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5 Lessons To Teach Your Kids About Money

5 Lessons To Teach Your Kids About Money

By Dr. Scott & Bethany Palmer for YourTango.com.

There is so much to teach your children. For starters, say “please” and “thank you,” wash your hands, respect your elders, chew with your mouth closed. Meanwhile, advertisers spend millions trying to teach our kids to “spend more!”

It’s true. Our children see more than 25,000 ads a year on television screens alone. Fortunately, even with all of those advertising dollars being spent trying to teach your kids that they need more, these five tips can combat those messages:

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1. Separate wants from needs. Don’t assume your child can readily see the difference between what they want and what they need. Sit down with your son or daughter and create two lists. Make one list for necessary items such as clothes, shoes, lunch, school supplies and medicine, and another list for items they want, like jewelry, trendy fashions, games and electronics. Readily see the difference between what they want and what they need. Compare the lists and talk through the differences. Point out the fact that you can’t go to school without shoes, but you can go without an iPad.

2. Say “no” and mean it. Kids figure out at a very young age whether mom or dad changes their mind if they whine enough. Often, they learn if they keep begging, you will give in. Next time you find yourself exhausted and ready to hand over cash for the remote-control hamster, stop. Say “no” and stick with it. Your children don’t need to be at the controls of that hamster or your family’s money matters.

3. Practice patience. Teach your child the value of delayed gratification. In a time where everyone wants things faster and easier, patience can be a difficult lesson but it’s one that will serve our children well for their entire lifetimes. Create a “save-for” list at home where they can write down a few things they’re saving for or waiting to get, and stick it on their bedroom wall. Patience takes planning.

4. Earn it. If they are certain they “must have” that certain something, help them earn the money to buy it. Putting in some effort to acquire something makes the purchase more satisfying. They could create a progress chart for their room so they can watch their incremental labors move them closer to their goal.

You may even find that if they pay for something themselves, they take better care of it and appreciate it far more than if it was handed to them. There are even times if their effort over time is required, their desire for the “latest and greatest” mysteriously evaporates.

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5. Save now, spend later. Sometimes your mom’s mom was right: You need to save it for a rainy day. If they are constantly spending all they have, or trying to spend all you have, nothing will be left when the unexpected — good or bad — arrives.

Each time your child receives money, encourage him to divide it into three “S” piles: spend, save, share. Talk through the reality of rainy days and happy opportunities that you don’t anticipate. Spend some time considering others with less and how your child might help. You can encourage saving and give it a little boost by matching the money they set aside with a set percentage of your funds.

Short of printing more money for people, The Mint has created a website to encourage savings. Plug in any amount into the “save each year” blank, select the interest rate, decide how many years you’ll save and it calculates the future, total amount of their investment. Compounding interest may not be as exciting as a new video game, but learning to save will score them big points later in life.

Teaching your kids the value of money is an investment both of you can take to the bank!

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Saving will come easier for some kids than others. We all have unique perspectives on money, and some money personalities enjoy saving more than others. But everyone can learn, so invest the time to instill the value of money in your children, and someday they may thank you. And those in line with you at the store may even thank you now.

Scott & Bethany Palmer
The Money Couple®
Creators of The 5 Money Personalities™

Scott & Bethany Palmer are regulars on national TV and radio and speak internationally about The five Money Personalities. To learn more about your Money Personality or take the free, scientific quiz to determine yours, visit www.TheMoneyCouple.com.

This article originally appeared on YourTango.com: 5 Tips To Teach Your Kids About Money.

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38 comments

+ add your own
9:11AM PST on Feb 19, 2014

Good advice

1:08PM PDT on Jun 20, 2013

Thanks 4 the great advice!

7:39AM PDT on Jun 13, 2013

my dad did such a good job in this department. The lessons were lost on my brothers however -_-

8:41PM PDT on Jun 3, 2013

I agree with this article, children need to know there more to life than cash.

8:40AM PDT on Apr 21, 2013

Thank you YourTango, for Sharing this!

5:37AM PDT on Apr 21, 2013

good ideas

7:21PM PDT on Apr 20, 2013

Thanks for sharing Idea

9:19AM PDT on Apr 17, 2013

Good tips, not only for children but also for adults.

6:57AM PDT on Apr 16, 2013

So where does compound interest come from? And no, I don't mean the numbers on a page. I mean the actual money. Is it 'just printed' ? Is somebody's labor involved. Do they get paid very little so the profit is more so the intrest on savings can be greater?Are people with savings and investments that have no tangible goods or services behind them just spreading around a means of exchange ? Why do some people think money needs a valuable thing behind it befor it's usable as a means of exchange?

8:23PM PDT on Apr 15, 2013

Good, so many teens have an entitlement mentality.

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Disclaimer: The views expressed above are solely those of the author and may not reflect those of
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