This post was underwritten by BMO Harris Bank, which offers a matching $25 on a new savings account opened for your child through their Helpful Steps for Parents program. Learn more at bmoharris.com/parents.
There really is no straightforward way to teach kids about money. You can explain to them what each coin and bill is worth, but teaching the value of money is much more complicated. It’s hard to pinpoint the exact age at which to begin this discussion, but I’d say a good time is when your kids start asking for things.
Maura, 4 years old, isn’t quite there yet. Sometimes she’ll see a commercial and shout out to me “I want [insert random toy]!”, but it never goes much further than that. Maya, on the other hand, doesn’t hold back. She quickly learned the difference between “need” and “want” and now thinks things over carefully before asking me to buy her something. If it’s something she needs, like a new pair of boots because hers are getting worn out, she knows that I’ll buy ’em. Maybe not right that second, but we’ll make a plan. If it’s something she wants, like a new Barbie doll, she knows that she can either add it to her Christmas or birthday wish list, or start saving up for it. We’ll pay for her lunch money, clothes and shoes she needs, and a roof to cover her head, but other than that, she’s on her own! 😉
Maya’s understanding of money revolves around a big blue piggy bank. The Money Savvy Pig, it’s called. It has separate compartments for saving, spending, donating, and investing, which I believe are all important lessons that kids should learn about from a young age. Just last week she emptied out ‘Donate’ to take it to school as a contribution for a diabetes walk. How does she choose how much to put in each? It’s all about the value of the coin. Quarters are saved, dimes are spent, nickels are donated, and pennies are invested. When she has dollars, they’re split between saving and spending. It’s been a couple of years now, and our system is working well.
Once in a while her dad and I will put our loose change in there, but mostly this is money Maya earns. For example, I had her selling water bottles and juice boxes during our neighborhood yard sale. She pulled out her toy cash register and was really serious about the whole thing. She’d even stop people at the end of the driveway, persuading them to buy something from her. She ended up with $40 at the end of the day and was so proud of herself! She also gets a small weekly allowance as long as her homework and chores are done. Sometimes I’ll give her a little extra if she goes above and beyond!
Maya’s also learning about being a smarter consumer. While I don’t obsessively clip coupons, I do keep an eye out for good deals, and sometimes she helps me out with this. When she wants to buy something, she always asks me if I happen to have a coupon for it first! She has also learned that buying secondhand is a good thing. When her new(ish) bike was run over by a car after she left it in someone’s driveway, she didn’t not complain one bit when we told her that at that time we couldn’t afford to get it fixed or buy her a new one, so we’d look for one at a consignment shop. She ended up with a loaner from a friend, but Santa’s elves may bring her a new one after all.
How do you teach your kids to understand money and its value?
I was selected for this sponsorship by the Clever Girls Collective. To learn more about BMO Harris Bank, visit their website http://bmoharris.com/parents.