How to Teach Kids About Money - What Mommy Does (2024)

FAQs

How to teach value of money to kids? ›

Teach Them About Budgeting

Tell them the importance of setting aside specific amounts for different spending categories and why following a budget is essential. As much as possible, you want them to realize that budgets are a crucial stepping stone toward financial success and should not be ignored.

Wealthy parents emphasize the power of passive income and investments. They teach their children early on about the magic of compound interest and the value of having money work for them, rather than constantly working for money.

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

Money is any object that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred payment.

Jesus never shied away from talking about money, however, and He often did so. He said that the way we use money reflects the state of our hearts (Matthew 5:42). He taught his followers to be generous, but to do so humbly (Matthew 6:2). And He said no one could serve both God and money (Matthew 6:24).

It doesn't matter how much money you make but how much you save. The only money that makes any difference in your life is the money you save. You may earn a lot but pay taxes and spend it on essential expenses, leaving next to nothing with you. Earning a lot of money doesn't make you rich, but keeping most of it does.

What does Rich Dad Poor Dad teach us? ›

The poor buy luxuries first, and the rich buy luxuries last. Kiyosaki reminds us that when share prices decline, people get scared, run away or sell up, but when the local supermarket has a sale, people buy as much as they can. Most people's lives are controlled by the two emotions of fear and greed.

Keep It Simple and Relatable

For all kids, especially young ones, it's important to make conversations about money and class relatable. That can help their understanding of why some people do well financially while others struggle. This was one of the reasons I rewrote the classic Little Engine that Could story.

He recommends teaching five- to eight-year-olds “very, very basic things” like that money has value and how choices made with it have an impact. For eight to 12-year-olds topics can be more complex, Landolt believes. “You can talk about the different types or uses of money.

Set Them on a Path Toward a Solid Financial Future. Managing money isn't easy. Waiting to learn about handling money until you are on your own as an adult makes it even more challenging. Teaching kids about money early on will help them to become more financially independent as they get older.

Age 7: How to understand the value of money

Louise Hill says, “It may feel very early to be starting serious conversations about money, but our research shows that by age seven, many money habits will be set. This is the perfect age to introduce the value of money.

One of the best ways to teach teens about the value of money is to give them space to make their own financial decisions with their money. Beth Zemble. VP for Education at GoHenry agrees. "To encourage spending wisely, allow teens to spend their own money on items they want.