It slips through your fingers as quickly as sand. Money. Kids seem to believe there’s a magic fairy that dispenses dollar bills to mommies and daddies everywhere. It doesn’t matter how often you explain that it doesn’t grow on trees, kids just don’t seem to understand.
Related article: How to coach your family to be good with personal finances.
To help, we’ve come up with seven unique and interesting ways to not just teach kids the value of money, but to let them see firsthand how it flows.
1. Play classic money games
There’s no better way to make a point than teaching by example. Pull out that old Monopoly board and have them be the bank. Let them do the math when you hand them dozens of dollars for taxes, rent, and to purchase property.
We also love Buy It Right, a game that helps kids learn the value of money, how to make change, even how to set prices. And a long-time favorite is from Rich Dad, Poor Dad author Robert Kiyosaki, the Cashflow game which teaches kids about how to invest, and let their money work for them. You can also play the game online for free.
2. Get them a real bank account
Don’t be afraid to teach them the value of saving money young. A piggy bank is a great start, but open a real savings account with your bank for them.
When you pay them an allowance, insist they put a portion of it into the account. Show them the statement from the bank every month, and how it grows just like yours does. Let them see with their own eyes how quickly the balance can grow, or shrink if it’s dipped into.
3. Have them raise a farm animal
Relax. We’re not talking about raising a steer in your backyard. Groups like 4-H and FFA help kids to raise everything from livestock to tomato plants. The truly awesome thing is that most of the time what they’re raising has to be sold. They are told to track their expenses and their time. Not only does raising a plant or an animal teach responsibility, they’ll get to see how much time and money goes into raising their project.
4. Have them start an in-house business
Though a lemonade stand is a great option, get creative. Have your child (or children) become the business owner(s) of a cleaning service, or gardening service, or of a dog grooming business. You become the first customer. Have them work every night for a week. Pay them an actual wage. Use fake money, like the play money set we found on Amazon, but give them the current minimum wage. Then ask them to pay for their meals. It’s all for fun, of course, but it’ll provide a powerful lesson.
5. Let them do the grocery shopping
Relax your grip on your sacred grocery list and give it to your kid, along with cash. Maybe even tell them they can have the leftover money if they find ways to save. Don’t be afraid. Help them add up the purchases and watch the light bulb go off over their head. Don’t be surprised if they go from wanting everything in sight to picking the bargain basement discount items. It’ll teach them to be frugal and smart with their money.
6. Show them the money
Using your fake money from above, “withdraw” your monthly salary. Show all that money to your child … then start paying the bills. Use actual figures. Let them see firsthand how quickly your monthly income dwindles away. Here are some more great ways to help you teach your children how to manage money from Family Education.
7. Let them run a business on their own
Of course, there’s always the tried and true technique to teach your children about saving and spending money. They could sell crafts at fairs or mow lawns around the neighborhood. You might help them hold a monthly bake sale or car wash. Just be sure to deduct all their expenses, too. Maybe even create a profit and loss statement, using these worksheets from Scholastic to explain the concept. Make sure they do all the calculations themselves. It’s one thing to tell them how much money they’ve earned, another thing to have them figure it out on their own.
However you decide to do it, there’s no underestimating the importance of teaching your child the value of money. They’re never too young to learn, either. So go on. Get creative and teach your kids that money truly doesn’t grow on trees.