Top Tips to Teach Kids about Money, Frugality, Saving & Spending

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Top Tips to Teach Kids about Money, Frugality, Saving and Spending

When was the last time you tried to get your child engaged in thinking frugally? It isn’t just about saving pennies in the piggy bank anymore. Granted, you may have tender aged children that can’t cut coupons or do math problems in their head yet but if your kids are a little older, why not get them involved? If you have more than one child, how do you tap into their individuality and teach them about money, frugality, saving and spending? We list some ideas and tips to help you get started.

For younger children under 5:

  • When shopping with children at the mall, be clear before you hit the store that you will only be looking at sales racks. Have them alert you when they see them. This is fun for younger children. However, they’ll get bored fast so don’t linger for two hours. If you stay too long, your child won’t have a good experience and everything you used to engage them just went out the window.  Hit a couple of racks and get out of there.
  • At the grocery store, have them keep their eyes open for the “blinkie” machine. These are the little machines you see on the isles that have a little red blinking light. That’s why their called “blinkies”. These can have coupons in them that are free to shoppers. Kids love to hunt for these!
  • Talk out loud to your little one about saving 50 cents on this or $1.00 on that. Even if they don’t fully understand yet, they are still drinking in your words and it’s good for their vocabulary!
  • Be organized and have a plan. Have your lists and coupons prepared before you leave. Small children have a shorter attention span and will get cranky waiting if you have to search for coupons or retracing your steps.
  • Have them count out things like fruit, yogurt cups or even coupons at the register. This is another fun way to help your little one with their counting skills.
  • Set a time limit when shopping. I’ve lost rack of time and had a kid meltdown right then and there a few times because I took too long. Shopping can be a real drag and can seem to take forever when you’re a little kid!
  • Make it fun! It’s shopping, not rocket science. If other shoppers happen to walk by you while you and your child are singing about watermelons, (which I myself have done countless times) who cares? If you can make shopping fun while teaching, you’ve discovered the holy grail!

For children ages 5 and up.

  • Allow them to earn their own money. At around age 5, we gave our kids an allowance of one dollar for every chore they did, if they followed through daily for one week. They only earned $1 or $2 a week, but it was a start.
  • Create a chore chart to keep track. Having a chore chart gives a child a visual of what they’ve accomplished and helps with organizational skills.
  • The three money jars/envelopes. Set up three jars or envelopes and mark them. One for savings, one for spending and one for giving. You child will be able to see with their own eyes what is happening to their money. Be sure to keep them out of reach of little ones as loose change can pose a choking hazard. I know you know that..I did however have to say it. 😉 At a young age, kids can start to grasp the idea of not having instant gratification or impulse shopping. They begin to understand they have to SAVE money to buy what they want. To break it down; for $1, have them keep $.25, save $.25 and put back $.50 for charity. Separate jars or envelopes keeps it all organized.
  • Take them on a trip to the bank and open up a checking account in their name. It’s a great experience and they’ll enjoy seeing those savings add up.
  • Use shopping as a math tool. This works great with school aged kids. Having them do math in their head is also terrific practice.
  • Are they eager to burn a hole in their pocket the second they get a dollar. Take them to the store and have them read you the price out loud, then ask, “Do you have enough money for that?”  This not only teaches that we can’t always purchase what we want, but instills saving and paying with cash.
  • If they do have the right amount for the purchase, keep a “think about it time” in play. It could be one day or one week. Taking time to mull over a purchase can be quite beneficial with decision-making and can help thwart off buyers remorse. Perhaps you can find it cheaper elsewhere.
  • While grocery shopping, have your child read the prices and weight of the product. Ask them which one is the better deal.
  • If you use coupons, have them help cut them. At the store, ask them what the final cost of the item will be after you use your coupons.
  • When you shop at them mall with older kids, ask them to tell you what the price would be after the store takes off, say 75% off an item.
  • Talk about how much money you save when you shop. You’re excitement will be contagious!
  • Communication is key! Be it at the supper table or impromptu moments, having open discussions about money is a good thing. For instance, if mom gets laid off from her job, it’s okay to explain that money will be tight for a while. You’re not doing it to scare them. What you ARE doing is giving them a heads up. It’s all about setting expectations which can lead to a child wanting to be more helpful and contributing what they can to the family. Life happens and we’re all in it together! Kids can then additionally relate better and have empathy and compassion for those they see who are less fortunate.
  • It’s not all about you. Teaching your child the unconditional love of giving to others is a gift that keeps on giving! When my son Aaron (who was around 7 at the time) gave $12 he had saved up to the Hurricane Katrina victims, he commented with, “Mom, I gave all I had.” I replied, “That was the greatest gift of all.” I couldn’t have been more proud. He was “getting” what I had been teaching!

KIDS OVER 16: can certainly get a job depending on the regulations in your state. Whether it’s at a local grocery store, or McDonalds, etc. the sooner a teenager can get into the work force the better. It’s a learning experience helping them to navigate having a boss, understanding earning a paycheck, paying taxes and being a team player with other employees. It is never in a child’s best interest (in my opinion) to shield them from responsibility. When a parent teaches their child to depend on their parents for everything, how will they ever know what to do on their own? As a parent, setting yourself up to be co-dependent is a disaster waiting to happen. That’s not to say we can NEVER help them..what I AM saying is it’s okay to say no, set limits and have boundaries. Having an open discussion with your teen allows them to know your expectations, find a common ground you can all agree to, then stick with them. You can always tweet the rules to accommodate any unexpected changes.

For large purchases like cars,  ipods, books for college or even paying a residual bill like a cell phone bill or car insurance, teenagers can contribute… if not pay for them all together. Naturally this is a parental decision on how you break it all down however, if a child is shielded from what the real world of money is about and NEVER contribute to paying for anything, it’s my opinion that you’re setting them up to always have their hand out to mom and dad. It’s our responsibility to TEACH. How will they know what to do as adults if we don’t take the time to give them the tools they need to succeed in life. Money is a BIG life issue and with your help, you can set them up for success!

I must admit, I do get that twinkle in my eye when my kids mention a good deal they’ve seen, check prices in stores and online or simply say, “I really want to buy that but I think I’ll wait until the price comes down.” Those are what I call, “stick with’em moments.” They are learning it isn’t all about instant gratification.

I hope these tips help and inspire you to get your child engaged in thinking frugally!

What are some tips that have worked with you and your kiddos? Please comment below and share what’s worked for you!




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