Blogging for Change

Lessons on teaching kids about money

by Renee McGruder on
7/13/2010
in Personal Finance , Budgeting and Building Savings

We’ve all heard the quote from Benjamin Franklin, “a penny saved is a penny earned.” This expression is even truer in today’s volatile economy. Wise financial planning encourages wise spending and saving for the future. Learning smart spending habits can have a profound impact on a young child’s life. The financial lessons children learn today will last well into adulthood.

According to a recent survey by T. Rowe Price, a global investment organization, 48 percent of parents indicated that they are having more discussions with their children about money, saving, and spending than in years’ past. There are many simple ways to incorporate financial lessons into your child’s everyday life. The financial experts at Money Management International offer the following tips in raising financially smart kids.

Turn grocery shopping into a teachable moment. This is a great opportunity to teach kids about comparison shopping. Teach children how to shop by value rather than brand.

Remember to always shop with a list. Shopping with a list helps children understand how prior preparation can lead to great savings in the end.

Give children an allowance. There are differing opinions on whether or not to give children an allowance. While some may consider it “spoiling” kids, giving children a regular “income” can be a great opportunity to teach them the basics of earning, spending, and saving. Parents can also use an allowance to help children learn the difference between wants and needs.

Help your child open a small business. During the warm summer months, lemonade stands are common in many neighborhoods. This is a great way for young entrepreneurs to learn financial skills. The adventure of starting a small business is a great financial and confidence-building lesson for kids. Children learn how to set and achieve goals, understand profit and price, and further develop basic math skills.

Open a checking/savings account for your child. Many banks and credit unions offer parents the opportunity to open an account in their child’s name. Owning and maintaining an account helps children learn important life skills. There are many ways to teach children about money.

The most important thing parents can do is to communicate with their children about managing money and budgeting. Parents should offer several examples of how money is earned and give children an opportunity to help decide how it is spent. And, most importantly parents need to educate children about the dangers of overspending, borrowing too much, and paying high interest.

 

Renee McGruder is a former communications coordinator and grant writer at MMI.

Recommended Articles

Man sitting in front of pile of bills, trying to understand his options.
Professional Budget Advice
Make the most of every dollar and start building toward your dreams! Budget counseling is FREE and available 24/7.
Learn More
Learn more
  • Better Business Bureau A+ rating Better Business Bureau
    MMI is proud to have achieved an A+ rating from the Better Business Bureau (BBB), a nonprofit organization focused on promoting and improving marketplace trust. The BBB investigates charges of fraud against both consumers and businesses, sets standards for truthfulness in advertising, and evaluates the trustworthiness of businesses and charities, providing a score from A+ (highest) to F (lowest).
  • Financial Counseling Association of America Financial Counseling Association of America
    MMI is a proud member of the Financial Counseling Association of America (FCAA), a national association representing financial counseling companies that provide consumer credit counseling, housing counseling, student loan counseling, bankruptcy counseling, debt management, and various financial education services.
  • Trustpilot Trustpilot
    MMI is rated as “Excellent” (4.9/5) by reviewers on Trustpilot, a global, online consumer review platform dedicated to openness and transparency. Since 2007, Trustpilot has received over 116 million customer reviews for nearly 500,000 different websites and businesses. See what others are saying about the work we do.
  • Department of Housing and Urban Development - Equal Housing Opportunity Department of Housing and Urban Development
    MMI is certified by the U.S. Department of Housing and Urban Development (HUD) to provide consumer housing counseling. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD provides support services directly and through approved, local agencies like MMI.
  • Council on Accreditation Council On Accreditation
    MMI is proudly accredited by the Council on Accreditation (COA), an international, independent, nonprofit, human service accrediting organization. COA’s thorough, peer-reviewed accreditation process is designed to ensure that organizations like MMI are providing the highest standard of service and support for clients and employees alike.
  • National Foundation for Credit Counseling National Foundation for Credit Counseling
    MMI is a longstanding member of the National Foundation for Credit Counseling® (NFCC®), the nation’s largest nonprofit financial counseling organization. Founded in 1951, the NFCC’s mission is to promote financially responsible behavior and help member organizations like MMI deliver the highest-quality financial education and counseling services.