Teach Your Children About Finance

As Crosby, Stills, Nash & Young sang so many years ago, “Teach your children well.” I’m sure we all agree with that sentiment. Teaching them manners, to study their schoolwork, to be nice to other people, and to be honorable is all good of course. But teaching them about money and how money works will give them a big advantage in life. Toward that end here are a few tips on when and how to teach your children about money and financing, including the use of games to help them learn what they should know in order to navigate through a complex financial world.

To begin with, start talking to your children about money when they are young. Even preschoolers can start to learn about the basics of money, such as the value of coins and bills, how to make purchases, and the importance of saving. As they get older, you can gradually introduce more complex financial concepts, such as budgeting, investing, and credit. When my four sons were young, my husband and I created a “chore” sheet. We listed chores, such as clear the dinner table, fill up the dishwasher, dust the cobwebs and put away their toys.

Each of those chores had a monetary valuation, and if they performed those chores, they could earn money. They loved that idea and learned the concept of work as a way to make money to buy things they wanted. As they got older, the chores became more sophisticated and got bigger, such as fold the laundry and put it away, wash the car and sweep the driveway, but the money got bigger and they liked that as well. To incentivize them even further, we made a deal that when they earned $10, we would match it and that worked brilliantly! We were also lucky because they didn’t have the desire to play video games.

While not as challenging as talking about the birds and the bees, the goal is to help them develop a positive relationship with money and teach them the skills they need to be financially responsible adults. Here are some tips about how to talk about money.

Use age-appropriate language and don’t overwhelm your children with too much information at once. Start with the basics and gradually add more complexity as they get older.
Be positive. Don’t make your children feel guilty about wanting things or about making mistakes. Instead, focus on the positive aspects of financial responsibility, such as the freedom and security that it can bring.

Make it fun. There are many ways to make learning about money fun. One of these ways is to play board games. A bit old fashioned but very effective and provides family time where you are actually talking to your kids. The goal is to make learning enjoyable for your children so that they are more likely to remember what they’ve learned.
There are many board games that can help children learn about money and have fun doing it. Some of these games are specifically designed for teenage children, while others can be adapted for use with younger learners. Here are a few examples:

EASY MONEY by the Parker Brothers and MONOPOLY by the Milton Bradley Company. These very similar games are designed to teach children about the value of money in real estate. They’ll experiment with buying and selling, building, borrowing, banking and mortgaging. In other words, making money.

PAY DAY by Parker Brothers/Hasbro. In 15 minutes, players will earn a paycheck, pay outstanding bills, and have the opportunity to make deals on property and earn money from it (passive income for the win!).

THE ALLOWANCE GAME. After a few rounds, kids will become familiar with counting money and saving it, too. The game board is full of different chores to do which earns them cash, so expect the kids to get lots of ideas about doing work around the house.

THE STOCK EXCHANGE GAME. Here the players take big risks early and then switch to safer buys later as retirement approaches. The player with the most money at retirement wins the game, just like in real life.

These are just a few examples of games that can help children learn about money. There are many other games available, so you can find one that is appropriate for your child’s age and interests.

Another way to teach your children is by getting them to read books of which there are several age-appropriate ones to buy. For little ones, 7 and up, there’s “The ABCs of Economics” by Connor Boyack and Elijah Stanfield or “My First Book of Money Basics” by Sara Kale. As they get a bit older, there’s “Understanding Finance” by Linda Connor. And remember, there are lots of other choices to seek out. These are just a few.

Talking to your children about money is an important part of parenting. By starting the conversation early and making it fun, you can help them develop a positive relationship with money and the skills they need to be financially responsible adults.

The most important thing when talking to your children about money is to be open and honest. Don’t be afraid to talk about your own financial situation and let them know that it’s okay to make mistakes. After all, no one’s perfect, right? The goal is to help them develop a positive relationship with money and to teach them the skills they need to be financially responsible adults.

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