I was selected for this opportunity and compensated by T. Rowe Price. The content and opinions expressed here are all my own.
This month on Momof6, I am sharing all kinds of ways to “Save $, Shop Smarter”- but beyond striving to improve these skills as adults- this is something that we should be teaching our children to do as well. And the job of giving our kids a financial education really falls on us as parents, it is not something that they are going to learn in school. At our house my kids put their birthday and holiday money as well as any money they've earned through chores and extra help around the house into a “savings jar”, and when they want to buy something (especially something expenssive like an iPad Mini), we sit together and talk about the price, how long it might take to save for that purchase, and practice counting out their money- and hopefully I am teaching them the importance of planning and saving for things that they really want. When the kids reach the age of 10- they have to put 1/3 of their saved money into a college savings account and they can only spend 2/3 of any money they receive or earn.
But am I doing enough? What else should I be teaching them at each age?
How to Teach Kids About Money
Teach the Teacher
A great resource that you can use to sharpen your own financial skills first is on the parent section of the website “Money Confident Kids”. You can start by taking a quiz to test your “Money Smarts” (C'mon, who can resist taking an online quiz to prove how smart you are!), but make sure that you don't miss this post written by Stuart Ritter called “Talking to Kids About Money Matters” that gives you a list of financial vocabulary terms to teach your children by age. Now while my kids definitely knew the term “ATM” by age 5 (and believed it to be a free-flowing cash-dispensing device), I am not sure that my 10-year old understands “inflation” yet or really has a handle on “taxes” and how they work. This article is a great guide to get parents thinking about how to teach their kids about finances.
Reach the Kids Where They Like to Play
I think I can get my kids to learn about pretty much anything if the lesson comes packaged in a cool interactive app that they can download to one of their devices. (I've pondered creating an app that instructs and rewards them for changing out the empty toliet paper tube!) Fortunbately, T. Rowe Price collaborated with Walt Disney Imagineering to create The Great Piggy Bank Adventure® game which offers lessons on goal setting, spending versus saving, inflation, and diversification. And marrying the financial smarts of T. Rowe Price and the amazing technology of Disney Parks results in a fun interactive game that my kids love!
Now while my 7, 8, and 9 year olds needed some assistance reading some of the questions and answers, and required an explanation regarding the concept of “pirating a movie” (“if you didn't have enough money to see a movie, would you pirate it or would you save up for it?”), they did enjoy roling the dice, answering questions to win “Truffles” (money), and saving up for purchases in the online shop. Some of the purchases allowed them the ability to earn future Truffles- such as “buy a guitar, practice, and earn a college scholarship” (I like these kinds of lessons!). While my older kids (11 and 12) felt that the questions were too easy (I think if they had put their “coolness” aside for long enough, the questions would have become progressively more challenging), my younger ones loved playing the game. And it definitely caused them to stop and think about how they should answer the questions.
What kinds of things are you doing at home to teach your kids about managing money? Please leave a comment and share your ideas with all of us!