Two weeks ago I was at the store with my daughter and she noticed two bears. The smaller one was $12 while the larger was worth $16. “Mom, see this price difference, it doesn’t make sense.” I was filled with joy as I watched her with amazement. Even though she is only in the third grade, my daughter can notice the price discrepancy between the two bears. Two years ago I started teaching my kids about money, and that interaction was a sign of progress. Here are the tips I used to get here:
1. Just do it
At the moment, only 17 states have made personal finance courses mandatory in high school. Therefore, there is a possibility that your teen will not learn about money in school. So, regardless of how uncomfortable the topic is for you, just go ahead and talk about it. Your kids will thank you when they grow older. Some topics you can introduce from the start include how money works, how much things cost and how your family makes money.
2. Honesty is a great policy
When you go out shopping with your children, be open to them about what you can afford. Even when you can afford something, let them know that you will not purchase the $10 crayons yet the $5 ones are perfectly good too. Avoid skimping over the particulars, tell them about prices and let them understand what is reasonable and what’s not.
3. Allow them to make their decisions
The best way for children to understand prices and money is if they manage their own. You can achieve this by giving them a weekly allowance and allowing the older ones find a job. You may also give them a budget to work with. Until when kids make money decisions without your influence, they will continue viewing money as a theoretical concept. It is also interesting to see kids discern what to do with their own money.