When kids see cash come out of an ATM, or with the swipe of a plastic card, to get their favorite milkshake, it seems like magic. In doing so they get an unrealistic perception of money. And because they’re not the ones earning it, a dollar’s value can be hard to instill. But luckily, you don’t have to wait until they earn their first paycheck to start teaching kids about money.
Try out these interactive ideas for making money seem more real:
Allow them to earn and spend other types of “currency.”
If your kids don’t receive an allowance, or aren’t the lemonade-stand type, consider turning other things they value into “currency.” For example, make their TV minutes or access to special art supplies and games into something that can be earned and spent. If they want to “save up” one hour of TV-time per day, they can then watch a longer movie later in the week. (You might want to reset “savings” each week so your kid doesn’t end up with a movie marathon’s worth of TV time!)
Encourage kids to have specific savings goals.
Saving money for savings’ sake probably isn’t going to get your kids excited. However, if you help them choose a specific purchase or goal for the money they save, they’re more likely to keep at it. Plus, delayed gratification is an important skill to teach kids, both in regards to money and life in general. For the younger kids, try buying the item they’re working on or cutting out a picture of it and keeping it somewhere visible (but out of reach!). Kids need visual reminders to stay on track.
Teach basic budgeting.
Whether it’s with allowance funds, cash gifts, or money “earned” around the house, your kid probably handles some amount of money. With the money itself comes financial decision making. Don’t let this lesson go untaught! Help them make a plan for how they’ll divide their money: spend, save, and donate, and a potential time range in which they can spend it. If your kids don’t have access to enough actual money for this lesson, try using a set amount of candy or toys that can be eaten or played with, but with limits.
Have them use a clear coin bank.
This way, they see their pile of coins visibly growing. This makes it a lot easier to motivate them to keep at it! They can even make a goal to save a certain % of the coin bank—a more visual goal than saving for a certain number of weeks, for example.
Use cash whenever possible.
When your kid sees a little piece of plastic slide through a card reader or watches you insert debit a card into an ATM that shoots cash out, it’s difficult for them to understand the transaction. When paying for things in front of your kid, try to use cash to make the exchange clearer.
Using interactive visual and tactile activities can make learning complex money lessons a whole lot easier. Combine those activities with real-life results—whether that’s a toy bought with savings, TV minute “currency,” or an ice cream cone purchased with cold, hard cash—and your kids will be on their way to budgeting, saving, and spending responsibly for years to come. Stay tuned next week for more ideas on how to make money real for kids!
What interactive ways are you using for teaching kids about money?