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Communicating the Value of Money to Children

By Patty Moore, blogger @WorkMomLife on Twitter! Give her a follow!

One of the best things you can do for your child is to teach them good money management techniques. If you just recently learned good money habits, it can be daunting to start thinking about teaching your child how to handle money. However, it’s never too early to really start introducing them. Let’s talk about some ways to approach money management with children in age appropriate ways.

5 ways to start teaching your child about money


Get them a clear jar or piggy bank to start saving money in.

You should start teaching your child about saving money from the minute they can start asking for things in stores. That’s when it’s time to start teaching them that you exchange dollars and coins for stuff. It’s traditional to get your child a piggy bank when they’re very young, but a clear container is more beneficial because they can see the money grow and it’s not a “surprise” in the end. They will be more encouraged to save when they can see their money growing, and you talk with them about how it’s growing.


Show them that stuff costs money.

It’s not enough to dismissively tell your child that they can’t have a new toy because it costs money. Instead, you should start an open dialogue about prices. If Sally wants the new Barbie Doll, tell her how the Barbie Doll costs $10, and then ask them how much money she’s saved in her piggy bank. That will get the ball rolling about pricing and spending, and you can also get them thinking about needs versus wants. While you can provide for the things your child needs without them knowing, you can also teach them how their needs differ from their wants. Teach your child to think about their purchases by asking them if they may want something cooler than the Barbie Doll later, such as snacks or more tokens at a play place.


Make them earn their money with chores.

Once your child is old enough, make them start earning their money. This could be for something as simple as helping bring the groceries inside from the store, helping put them up, or chores such as washing dishes or sweeping. It’s important, when exchanging money for services, that you teach your child how to value the work that they’re doing. It could be beneficial to see how much a housekeeper would get paid per hour of service as comparison to what you would give your child. While you don’t want to give them too much for around the house chores, you also want them to be comfortable with asking for and understanding wages.

Get them a bank account and let them talk to the attendant.

It’s very tempting to help your child navigate through things that make them uncomfortable, but one thing that they just have to get comfortable with is talking to other people about money.  It’s important to let them speak for themselves and build their confidence with their money. When they’re ready or when the piggy bank is too full, take them to get their own checking account and plastic debit card.

It’s okay if you start an account early for them and deposit money regularly in there, but once they’re old enough, take them down to talk to a banker about their account. They need to understand all the regulations about money, and the terms and conditions on their own account is a good place to start. You can easily teach them about monthly and yearly fees, debit transactions, and things of that nature with their own bank account. And you should strongly think about setting up an online account for your child. Online accounts have much lower minimums, virtually no fees, and tools for parents to keep track of their account.


Talk about credit cards, debt, and loans!

As soon as your baby hits 18, they’re going to start receiving all kinds of credit card offers. If your child has applied to college, then they will have already been introduced to loans. For both credit cards and loans, they need to learn all the terms like interest, principal, and dividends.

They need to understand what debt and repayment really are. There’s nothing wrong with your child opening a credit card in their name when they’re old enough. If you and your child already have an open dialogue about money, you can guide them in the right direction when it comes to utilizing a credit card and paying off their debts.


It can be hard to even think about talking to your children about handling money if you’re not comfortable talking about money yourself. Maybe your parents hid the financial details from you when you were a kid, but you don’t have to be the same way with your children. Even if it’s scary, you can teach your child about money by starting young, letting them get involved in their money, and explaining things every step of the way from the piggy bank to college loans. After all, if you teach them well enough, they could even help you out when you retire!