7 tips on how to teach kids about money
March 03, 2022
By Sam X Renick, Financial Educator, SammyRabbit.com
Parents probably know this, but if they don’t, they should.
Kids are learning and mimicking machines.
It starts at birth. Once they arrive, they look and listen – to just about everything. They begin absorbing and recording what they see and hear. They start building neural highways that drive how they feel, think, and behave. It’s unavoidable.
If kids are learning, those around them are teaching, whether they intend to or not.
Kids are learning how to eat, get attention, love, and more. They’re also learning about money. They’re learning to desire, want, have, and consume.
Kids learn to make an association between money and getting things. How do we know this? Somewhere around age 3 or 4, kids magically, mysteriously, and assertively utter the words, “Mama, Dadda, give me this,” or “I want that.”
Ironically, at this point in a child’s development, many parents would swear they have “never talked” to their kids about money.
These are some of the huge, but solvable, challenges parents who want their children to have a healthy relationship with money must confront.
I created Sammy Rabbit, a cartoon character, to make it fun and easy for anyone to help shape kids’ habits, thinking, and feelings about money, at an early age, before children formed a crippling relationship with money.
So, as Sammy Rabbit says, “Let’s get to it.”
Here are seven tips parents can use to intentionally take charge of their kids’ money education:
- Write down and define what you want to teach your kids about money. Think of this as your money philosophy or money values. Minimally, you want one sentence that addresses your thinking on saving, investing, spending, earning, and giving. It can be as simple as “The Franklin’s love to save money.” “The Franklin’s invest every chance they get.” “The Franklin’s are smart spenders.” “The Franklin’s give wisely.”
Keep it simple. Make it easy to understand.
- Live your money philosophy. Be a strong role model, one worth be mimicked. Show your family the way. But, if you’re imperfect in your role modeling – and we all are – continue to be crystal clear on your philosophy. Communicate it regularly. Don’t let any imperfections, major or minor, paralyze you from parenting your children in the right direction.
It’s simple. If one is going to reach a goal or destination, it’s vital to know what that goal or destination is. Mastery requires repetition. Did I get tired of hearing my parents repeat the same things over and over as a child and teen? Yes. However, as a maturing adult, I thanked them. That‘s something I didn’t foresee at 7 or 17. Lean into the wisdom of generations of elders. I know my parents’ made mistakes. But what I know now is they did quite a bit correctly.
- Have your kids get in the habit of saving money early. Put a transparent savings jar in their room where it’s visible. Make deposits to it regularly. Have them participate in the process with you as soon as you think they’re ready. And, then shake that bank. Celebrate the habit of saving. It’s a powerful positive habit for several reasons. It teaches a child to delay gratification, which aids children in every endeavor of their lives. It sets them up for sustained and growing success perhaps more than any other skills.
- Incorporate books with money lessons into your story telling and reading regimen. Stories are a wonderful way to transfer knowledge. Naturally, we love our books – “It’s a Habit, Sammy Rabbit” and “Sammy’s Big Dream.” There are lots of other outstanding ones on the market such as “The Berenstain Bears Dollars and Sense,” “Lucky the Golden Goose,” and “Alexander Who Used to Be Rich Last Sunday.” Visit our website sammyrabbit.com. You’ll find a list identifying another 100 storybooks there. https://sammyrabbit.com/
- Look for appropriate opportunities throughout your daily activities to talk to and teach kids about money. It could be when making lists or cutting and organizing coupons prior to going grocery shopping; when eating at home or at a restaurant; or on a commute to school. It could be while paying bills, doing the budget, or reading an article about personal finance or reviewing a bank or investment statement. The possibilities are endless.
Keep it short. Turn it into a game. Make it a challenge. Establish a ritual. Add incentives and rewards as appropriate.
- Have a monthly family money hour. Talk. Read. Play games. Listen to music. Listen to a podcast. Do trivia. Review a statement. Recycle. Do a compound interest calculation. Count pennies. Make deposits into a family savings jar. Discuss plans on how to use the money in the jar.
Create a culture of family fiscal prudence.
- Don’t give your kids everything you didn’t have as a child. Instead, give your kids plenty of earning and entrepreneurship opportunities. Help them form a strong work ethic.
Three big benefits of developing a strong work ethic have nothing to do with money. It builds competence and self-esteem. And, people generally like, respect, and admire – and even are inspired by – people with a strong work ethic. Now those are Sammyriffic gift to give a child.
Remember, it’s a journey. Education is a process. Help your kids to enjoy it. Help them to develop a hunger and curiosity for lifelong learning. One of my heroes Benjamin Franklin says, “An investment in knowledge pays the best interest.”
I love this. Although we instilled having savings for our sons as something good, wish I'd put more thought into what our money philosophy was. Both guys are doing well financially, so something good happened after all. Phew.
Posted by: Laurie Stone | March 07, 2022 at 06:21 AM
My kids somehow managed to be really good with money despite the fact that I was clueless. But it's important and sadly, not taught well enough, or at all, in schools.
Posted by: Rebecca Forstadt Olkowski | March 07, 2022 at 07:13 AM
Laurie and Rebecca, I'm glad your kids turned out to be good with money. Come to think of it, mine did, too, despite the fact that their dad, my ex-husband, was a spender.
Posted by: Rita | March 07, 2022 at 12:11 PM