Does your child think that money grows on trees? Do you buy them something they are “dying for” just to see it on the floor later? If you answered yes (and I’m sure you did), then welcome to Teaching Kids about Money 101!
After doing some research, I saw that teaching kids about money should start between the ages of 6-12. In order to do this, they first need to know what money is and how to count it. At school, if they are lucky, they play in a center called dramatic play where they can pretend to play store and grasp a concept of wanting items and giving play money for those items. This is a great foundation to their learning experience. As they get to be 7-8, they start to ask for things and money to get those things but they don’t quite know how money really works like how we get it and budget it. This is the stage we are at with Elise.
My husband and I have realized that Elise thinks money just appears when she snaps her fingers (Yes, this is our fault for spoiling her too much). We recently decided to try out the whole “money for chores” gimmick because we hope that it will help her become more responsible as well as learn how to manage money better. Now, I say gimmick because I don’t think kids should be paid to keep their room clean. They live there rent free, with free food, clothes, electricity, and transportation so it’s the least they can do. Also, there is a fine line between chores and life skills like brushing your teeth and bathing on a regular without me having to ask.
Nevertheless, we developed a list of chores and a set amount for allowance that she can earn on a weekly basis. We are managing this with an app called Greenlight! Greenlight is a banking app for kids and teens that teach them how to manage their allowance money by giving the option to save, spend, and invest. They get their own debit card that you can add money to by doing a direct deposit whenever you want. The app shows their account balance, purchase history, and chore list. They also get 1% back on purchases which automatically goes to their savings. This is a great way to learn with your child and teach them monetary longevity. There are 3 different plans that rate from $5 to $15 a month and each plan comes with different perks. Kids get very excited about getting their own debit card and being able to make decisions on how to use it to get real things. On a cheaper scale, you could also do a cash app type of card and add the money as needed.
While there are so many apps, books, and games that you can purchase to help teach your child about the importance of money knowledge, the most important thing is to start having conversations about money. Have your kids sit with you while you budget and talk about saving for important things. Money is often a stigma in families and we need to get rid of that stigma to move forward. Check your banks for resources on financial information and see if your state offers a bank just for kids. Play Monopoly or The Game of Life with your kids so they can learn about investing in property and what it means to owe money. Whatever means you can find to get them interested, do it! It will literally all pay off later!