I want my kids to grow up to live full and healthy lives. I want their relationships to be strong, so I try to nurture bonds within our family and extended family. I want their body image to be unshakeable, so I don’t bad-talk my body and try to maintain a positive attitude toward food. I also want them to have healthy money habits, but how exactly am I supposed to do that? While there are tons of articles on body positivity and maintaining strong family bonds, raising money smart kids is something many of us don’t know how to do.
I know I made a lot of mistakes with money early on in my life, and you never really stop paying for the missed opportunity cost of not knowing how to manage your finances from the start. Kids who have a good money foundation are set up for success their whole lives, so I’m determined to figure out how to raise kids with healthy money habits.
Luckily these four money-savvy moms are sharing their tips on how they are raising their kids to be smart with their finances from the very beginning.
Give budget lessons in the real world – Jeanne Sager fell into her financial lessons with her 11-year-old daughter by accident. One evening at dinner, her daughter grabbed the receipt and was shocked at the sticker price of the appetizer she had begged for (only to not eat her whole dinner afterwards). She quizzed her daughter on how many more drinks they could have bought if they had skipped the appetizer, and a math/budget tradition was born. “Now, I’ve started handing my daughter receipts when we leave a store and doing simple math problems with her based on what we bought. It helps her practice math, but it also gives her a sense of what things actually cost and the impact on our budget.”
Build a strong work ethic – Gillian Shulte, a mother of two whose kids are now grown, explains that she taught her kids the value of a dollar by making them work for it. “As parents, we wanted to teach our kids that money had to be earned. My kids weren’t just handed an allowance, they had a work-pay option. For doing chores, they got paid pretty well, but all I was doing was giving them the money I would otherwise have spent on the things they were now going to be responsible for,” she explains. Her kids took on the responsibility of paying for everything except food – school supplies, clothing, toys, etc. “Because of this, they became more responsible with their belongings. I remember one time my daughter lost her coat; something that commonly occurred with a lot of her belongings, but this changed when she realized she was the one having to purchase the replacement. I believe that this was a good life lesson for her. It certainly made her more responsible and respectful with her purchases. It’s probably the reason that she is so diligent with her budget to this day.”
Credit or Debit? When you aren’t using cash, it can be hard for kids to understand the concept of money. Whether you are using credit or debit, sliding a card looks and feels the same to kids. Breanna Meade, 29, is teaching her kids from an early age that there is definitely a difference. “One thing we do is we talk about why we are or are not making a purchase (do we need this or not?) and explain really simple concepts using the cash register that they play with. For example, my three year old and my five year old understand that debit means ‘you have to pay now,’ and credit means ‘you pay later.’ I’m expecting to continue to have conversations about why it’s better to pay now – i.e. you know you have the money, you don’t have to worry about where the money will come from later. It’s really cute to see my three year old yell, ‘Debit or credit, mom?’ When we are paying for something, and I know that these concepts will become stepping stones for more advanced reasoning.”
Jumpstart their savings sense – Instead of the usual sticker chart for good behavior, Chaunie Brusie, mother of four, decided to take it a step further and give her kids a lesson in savings. “I implemented a reward system where my kids get tickets for extra special good behavior and every Sunday they can cash in their tickets for items out of the reward bin. I put two “big ticket” items in so they would have to save for several weeks if not months to get them to introduce the concept of saving the tickets!” Giving her kids a goal to work toward will hopefully pay off in the long run, when they need the patience and discipline to save money out in the real word.