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10 Simple Ways to Teach Your Children About Money

Physician with child

How to Make Learning about Saving and Investing Fun for the Whole Family


“The best way to teach your kids about taxes is by eating 30% of their ice cream.” – Bill Murray

While eating your children’s ice cream may not actually be the best way to teach them about money, it is true that learning financial concepts at young age can help your children later in life because many adults’ relationship with money is influenced by childhood memories. What are your earliest memories about money? Did you hear your parents argue about financial issues? Did you see your parents getting up early and coming home late from work? Do you remember saving your allowance to buy a special toy? Are you worried that your success as a doctor may give your children a distorted sense of the value of a dollar?

Everyone has different experiences related to money, but few of us were formally taught about financial matters as children. Instead, managing money is something we picked up (or failed to pick up) along the way. However, as most parents would likely agree, money lessons are important ones that overlap with many other aspects of our lives. Like so many things, the more we learn, the better decisions we are able to make. Following are a few fundamental ideas to keep in mind as you begin the process of educating your children about money.

  • Don’t be afraid to talk to your children about money.
  • Keep your explanations simple and make them relatable to your kids’ everyday lives.
  • Listen to and observe your children. Pay attention to how they handle money or behave relative to financial matters. This is how you will learn how they think about money.
  • Don’t be afraid to ask your children questions. What lessons have they learned? What questions do they have? As you know, children are usually happy to talk if you give them a chance (and even when you don’t!).
  • Remember that money-related discussions don’t have to be boring. Find ways to make it fun, engaging and interactive.

If you are concerned about your kids having a distorted relationship with money because of your financial success, there are two important lessons you can focus on:

1. Learning the word “no” – This means your kids learn to hear no from you and from themselves. The goal here is to teach them the difference between a “need” and a “want” and how to defer gratification.

Every kid thinks he needs the latest and best clothes, bikes, video gaming consoles, etc., and if he is always given everything he wants whenever he wants it, he won’t understand the work it took to earn the money to purchase those items.

A great way to teach your kids about needs and wants is by giving them a budget for certain purchases. For example, if you’re taking your daughter school shopping, provide her with a specific budget for how much you will spend. This will help her prioritize her purchases. Maybe she decides she needs the designer jeans but can go with off-brand tops, for example. Or maybe she decides on the less expensive jeans so she can get the jeans and a new pair of shoes.

Keep in mind that if your children aren’t accustomed to living within a budget, they may get into trouble with credit card debt later in life as they try to sustain a lifestyle that is above their means. “No” is not a dirty word. It’s a very important one to teach your children at a young age.

2. Being generous – We all want to raise children who are kind and generous, but they don’t learn those qualities in a vacuum. It’s up to parents to demonstrate these important skills.

Many physicians generously give back to others, which provides a great opportunity to involve your children in your charitable efforts. Bring them to philanthropic events. Allow them to have a say in the charities you contribute to. Show them how a portion of each paycheck goes directly to helping others. Encourage them to do the same by giving a portion of their own allowance to charity and by participating in community service.

Not only will your kids develop a better understanding of how money can be used to help those less fortunate, they’ll gain an appreciation for what they have and feel empowered to make a difference in the lives of others.

Here are some fun and simple ways to help you teach your children about money:

  1. Use a clear jar or piggy bank to help them save. This allows them to see their savings grow over time.
  2. Foster opportunities for them to earn their own money by paying them an allowance for doing helpful chores around the house or encouraging them to find odd jobs in the neighborhood. This teaches them how to work for their earnings and provides them with a better appreciation of the value of a dollar.
  3. Visit your local bank. Take a tour. Introduce your kids to the staff. Help them pour their change into the coin counter. Demonstrate how to use an ATM. Open a savings account for them. Don’t forget to grab a sucker on your way out!
  4. Clip coupons together for items they want/need/use and take them along the next time you go shopping to purchase those items at a discount. Be sure to let your children hand the coupons to the cashier. Then, show them how the discounts appear on the receipt and praise them for helping the family save money.
  5. Play money-themed board games like Monopoly and online games like Visa’s Money games. Visit practicalmoneyskills.com.
  6. Walk around the grocery store, toy store or the mall, and point out products your child knows. Then, compare the prices of these familiar items to different items. Make it a guessing game to see how close they can get to the actual price.
  7. Show them how to write down their financial goals (no matter how big or small) and revisit them often. Share some of your goals with them. Discuss successes and challenges you have had achieving your own financial goals.
  8. Help them establish a budget or spending plan. Talk to them about “wants” versus “needs” and help them prioritize their spending habits. Explain what it means to make an impulse buy.
  9. Read age-appropriate books, blogs and articles, visit websites, and/or listen to money-related podcasts together. These are all great ways to spend quality time together while helping your children better understand how money works. (See below for some excellent resources to help you get started.)
  10. Teach them how to balance a checkbook or read a bank statement. These are skills rarely learned in the classroom that are better taught in advance rather than allowing your child to figure it out by trial and error.

The following books can help your children learn more about managing money:

  • What All Kids (and adults too) Should Know About Saving and Investing, by Rob Pivnick.
  • Finance 101 for Kids: Money Lessons Children Cannot Afford to Miss, by Walter Andal.
  • Why Didn’t They Teach Me This in School? 99 Personal Money Management Principles to Live By, by Cary Siegel.
  • The Teen Money Manual: A Guide to Cash, Credit, Spending, Saving, Work, Wealth, and More, by Kara McGuire.
  • Teaching Kids to Buy Stocks, by J.J. Wenrich.
  • Make Your Kid A Money Genius (Even If You’re Not): A Parents’ Guide for Kids 3 to 23, by Beth Kobliner.

Check out the following resources, websites and apps if your children want to learn more or you want to make it a family activity:

  • Jumpstart Coalition for Financial Literacy
  • Selfsufficientkids
  • Moneytopia
  • Stock Market Game
  • FamZoo
  • BusyKid

Educating children about money doesn’t have to be difficult. Use these simple, fun and engaging resources to help your children grow up with a healthy and positive perspective about their money. The skills they learn will last a lifetime.

Physician Financial Freedom is a specialty practice of Creative Planning. Each of our dedicated teams specializes in working with doctors and includes an attorney, a CPA and a CERTIFIED FINANCIAL PLANNER™ practitioner. If you’d like additional assistance teaching your kids about money, or for any other financial matter, please schedule a call.

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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