Teaching kids about money isn’t just about explaining how to spend and save—it’s about giving them the tools to make smart financial decisions for themselves. Once your kids hit elementary or tween years, it’s the perfect time to get hands-on with teaching them money basics. They’re starting to understand how money works, and this is when you can help them develop essential skills for managing it in the future. Here are some fun and easy ways to teach your kids about money:
1. Show Them How Opportunity Cost Works
Kids may not realize that money doesn’t grow on trees, but they’re starting to understand that choices have consequences. Opportunity cost is a fancy way of saying, “If you buy this cool video game, you won’t have enough money for that new pair of shoes.” Teach them that every time they spend money, they’re making a choice between two things they want. By comparing the costs of different items, they’ll start to see how their dollars stretch (or shrink) depending on their choices.
2. Give Commissions, Not Allowances
Rather than handing out money for no reason, teach your kids that money is earned. Set up a system where they receive commissions for completing chores around the house, like taking out the trash, cleaning their room, or mowing the lawn. This helps them connect work with pay, and they’ll understand that money isn’t just given away—it’s earned through effort. You can talk about this concept in fun ways to make it stick, like explaining that each chore adds a “credit” to their bank account.
3. Avoid Impulse Buys
"Mom, look at this cute dress! It’s perfect! Can we buy it please? Pretty please?" Kids know how to push the right buttons to get what they want in the moment. To help your child practice resisting impulse buys, teach them the rule of waiting. If they want something that costs more than $15, they should wait at least 24 hours before buying it. The item will likely still be available, and this gives them time to decide if it’s really worth their money. (And hey, sometimes they might even forget about it, saving you both the expense!)
4. Stress the Importance of Giving
Once your kids start earning their own money, make sure you teach them about giving back. Help them choose a cause or charity they care about, and encourage them to donate a portion of their earnings. Whether it’s a local charity, a church, or even a friend who needs help, giving teaches your kids that money is not only for buying things—they can also use it to make a positive impact. Plus, they’ll feel great knowing their money is helping someone else.
By integrating these simple lessons into your routine, you’ll give your kids a strong foundation for making smart, informed financial decisions. Teaching them the value of money, hard work, patience, and generosity is an investment that will pay off for years to come.
