Today’s article comes from Kid Wealth. Kid Wealth explores and curates the best ways to educate kids about money. The website sells no products or services and has no advertising.
It’s always been tough to be a kid. However, I wonder if it is tougher now than ever. It seems like the world is stacked against kids these days whether it be social media bullies, COVID cancellations, or student loans and debt.
I don’t know how to fix social media bullies or COVID, but there are ways to raise money-smart kids. I’ve found that money has a way of fixing a lot of problems.
Five Ways to Teach Kids About Money
1. Set The Example
Whether you like it or not kids notice almost everything that we do. If they see you being frugal, they’ll learn to be mindful of their money. If you are always pulling out your credit card to buy the latest fashion fad they’ll learn to do the same.
2. Books, Books, Books
There are many, many kids books to teach money. Your library probably has a few. I wouldn’t worry too much about getting the best kids’ book about money. Any book is better than no book at all. I think it’s best to read a new age-appropriate book every 3-4 months.
There are great books for parents too. I recommend Bank of Dad by David Owen and Make Your Kid a Money Genius by Beth Kobliner.
3. Let Kids Make Money Mistakes
There is a show on Netflix called Old Enough that’s been running in Japan for several decades. The show follows toddlers (sometimes younger than 3!) as they run errands like going to the store and buying flowers for their grandmother’s birthday. The kids have a lot of coaching beforehand and the Japanese culture is set up for it. I certainly wouldn’t work in the United States.
It’s a lot easier (and safer!) to let kids make money mistakes. They may waste their money in ridiculous ways. It’s better for them to learn from losing a few dollars now than later on when more dollars are on the line.
4. Give Kids an Allowance
I realize there are different philosophies on giving an allowance. However, kids can’t practice using money and make those money mistakes if they don’t have money in the first place. Research shows that letting kids practice with money earlier helps create good habits. Don’t wait until the child is a teenager earning their own money.
5. Use The Right Tools
You can teach kids about money with tons of tools. The books are good sometimes, but kids love variety. Some of the tools I’ve compiled include television shows (Warren Buffett’s Cartoon, School House Rock), courses, podcasts, board games, and even video games.
Financial literacy is rarely taught in schools, so most kids are going to have to learn it at home. We’d be honored if you’d let Kid Wealth be your guide.
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