How to teach kids about money By composed by Mwawi John Makwakwa, 21st February 2022, Blantyre, Malawi. Mwawi.makwakwa@gmail.com Here are some of the ways on how to give your kids the head start you wish you had and set them up to win with money at any age. 1. Use a clear jar to save. 2. Set an example. A study by the University of Cambridge found that money habits in children are formed by the time they’re 7 years old.(1) Little eyes are watching you. If you’re slapping down plastic every time you go out to dinner or the grocery store, they’ll eventually notice. Or if you and your spouse are arguing about money, they’ll notice that too. Set a healthy example for them and they’ll be much more likely to follow it when they get older. 3. Show them that stuff costs money. You’ve got to do more than just say, “That pack of toy cars costs K5000, son.” Help them grab a few kwachas out of their jar, take it with them to the store, and physically hand the money to the cashier. This simple action will have more impact than a five-minute lecture. How to Teach Elementary Students and Middle Schoolers About Money 4. Show opportunity cost. That’s just another way of saying, “If you buy this video game, then you won’t have the money to buy that pair of shoes.” At this age, your kids should be able to weigh decisions and understand the possible outcomes. 5. Give commissions, not allowances. Don’t just give your kids money for breathing. Pay them commissions based on chores they do around the house like taking out the trash, cleaning their room, or mowing the grass. Dave and his daughter Rachel Cruze talk a lot about this system in their book, Smart Money Smart Kids . This concept helps your kids understand that money is earned —it’s not just given to them. 6. Avoid impulse buys. “Mom, I just found this cute dress. It’s perfect and I love it! Can we buy it please?” Does this sound familiar? This age group really knows how to capitalize on the impulse buy—especially when it uses someone else’s money. Use the best tools to teach your kids about money. Instead of giving in, let your child know they can use their hard-earned commission to pay for it. But encourage your child to wait at least a day before they purchase anything over $15. It will likely still be there tomorrow, and they’ll be able to make that money decision with a level head the next day. 7. Stress the importance of giving. Once they start making a little money, be sure you teach them about giving. They can pick a church, charity or even someone they know who needs a little help. Eventually, they’ll see how giving doesn’t just affect the people they give to, but the giver as well. How to Teach Teenagers About Money 8. Teach them contentment. Your teen probably spends a good chunk of their time staring at a screen as they scroll through social media. And every second they’re online, they’re seeing the highlight reel of their friends, family and even total strangers! It’s the quickest way to bring on the comparison trap. You may hear things like: “Dad, Mark’s parents bought him a brand-new car! How come I have to drive this 1993 Subaru?” “Mom, this girl at school got to spend $10,000 on her Sweet 16 party. I want to do that too!” Contentment starts in the heart. Let your teen know that their Subaru (although not the newest car on the block) is still running well enough to get them from point A to point B. And you can still throw a memorable, milestone birthday party without spending a chunk of your retirement savings funding it! 9. Give them the responsibility of a bank account. By the time your kid’s a teenager, you should be able to set them up with a simple bank account if you’ve been doing some of the above along the way. This takes money management to the next level, and will (hopefully) prepare them for managing a much heftier account when they get older. 10. Get them saving for college. There’s no time like the present to have your teen start saving for college. Do they plan on working a summer job? Perfect! Take a portion of that (or more) and toss it in a college savings account. Your teen will feel like they have skin in the game as they contribute toward their education. 11. Teach them to steer clear of student loans. Before your teen ever applies to college, you need to sit down and have the talk—the “how are we going to pay for college” talk. Let your teen know that student loans aren’t an option to fund their education. Talk through all the alternatives out there, like going to community college, going to an instate university, working part-time while in school, and applying for scholarships now . While you’re at it, get The Graduate Survival Guide for them. It’s a must-have resource to help your college-bound teen prepare for the next big step in their life. 12. Teach them the danger of credit cards. As soon as your kid turns 18, they’ll get hounded by credit card offers—especially once they’re in college. If you haven’t taught them why debt is a bad idea, they’ll become yet another credit card victim. Remember, it’s up to you to determine the right time you’ll teach them these principles. 13. Get them on a simple budget. Since your teen is glued to their mobile device anyway, get them active on our simple budgeting app, Every Dollar . Now is the time to get your teen in the habit of budgeting their income—no matter how small It is. They should learn the importance of making a plan for their money while they’re still under your roof. 14. Introduce them to the magic of compound interest. We know what you’re thinking. You can barely get your teen to brush their hair—how in the world are they supposed to become investment savvy? The earlier your teen can get started investing, the better. Compound interest is a magical thing! Introduce your teen to it at an early age, and they’ll get a head start on preparing for their future. 15. Help them figure out how to make money. When you think about it, teenagers have plenty of free time—fall break, summer break, winter break, spring break. If your teen wants some money (and what teen doesn’t?), then help them find a job. Better yet, help them become an entrepreneur ! These days, it’s easier than ever for your teen to start up their own business and turn a profit. Change Your Family Tree Teaching your children about money at any stage is going to take time on your part. It won’t always be easy. But if you want your children to know how to successfully manage their money when they get older, taking the time now will be worth it. One of the best ways to teach your kids about handling money is to give them a chance to make some of their own! With the Teen Entrepreneur Toolbox , you’ll get all the tools you need to help them start their own business and learn real-world skills Planting the entrepreneurial mindset seed in Children: A guide for Parents and Teachers Develop Entrepreneurial Skills in Children The entrepreneurial mindset enables children to overcome daily challenges, be decisive and take on responsibilities for any of their behaviors and activities. Developing entrepreneurial skills in children helps your children confront difficulties confidently and create values in their lives. The entrepreneurial mindset is referred to a certain way of thinking by which children confront disadvantages, mistakes and problems in life. The entrepreneurial mindset enables children to overcome those challenges, be decisive and take on responsibilities for any of their behaviors and activities. Children are born naturally entrepreneurs: they explore, prototype, roleplay and create with their creativity, curiosity and a fearlessness of failing. Along with time, they are put in force to follow disciplines – which, if not be carried out genuinely, are enemies of kids’ creativity and their development. Have you ever seen your children losing their stillness when they make mistakes and are scared of being scolded and punished? If yes, this article is to help you discipline your children, and yet develop their entrepreneurial mindset. Self-confidence Entrepreneurship instils the strong confidence in one’s self and own ideas. Children with a strong selfconfidence are more likely to have life experiences, readiness to take risks and resolve any problems that appear along their ways. How to develop self-confidence in kids? As a parent, it is necessary to encourage your kids to come up with ideas, freely speak out opinions and make decisions confidently. Although you know the decision is inappropriate, let them take actions within your careful observation and eventually explain to them why their decisions fail and what could be done so they succeed next time. A question can be solved with various answers; thus, you would rather suggest than appoint any specific solution. Innovation and creativity Children are born with innate creativity. They explore surroundings in their own ways and dive into their fascinating imagination world. Children, however, can feel challenging to solve a problem, for instance, how to get the laundry out of the washing machine when they cannot reach to the cap of the machine on their bare feet. Developing your children to be creative and innovate within the available conditions and resources can develop their self-confidence and problem-solving skills. How to develop innovation and creativity in kids? Be available and ready when kids need help in order to provoke their thinking and ideation, and not to do it yourself or appoint a solution. Ask them a lot of questions, for instance in the case as aforementioned, “Why cannot you reach the cap of our washing machine?”, “What do you need to reach it?”, “Besides a chair, what other ways can help you reach it?”. The aim of this practice is to ideate solutions as much as possible, exploiting the available resources in a limited surrounding. Initiative No matter how great the position might be, every entrepreneur are doers and always start with initiatives – make decision, take action and get involved. Regardless of how many solutions may children come up with, taking own initiative is a leverage to their accomplishments. Kids that are encouraged to act on their initiatives are likely to take risks, ready to solve problems and be responsible for their actions. How to develop initiative in kids? Get your children involved in housework, give them responsibility in certain tasks and specific expectation on the outcomes. When giving them the tasks, it is necessary to let them space and time to accomplish those tasks on their own. If there is a mistake or a problem occurred, you should ask your children what they have done wrong and let them the second chance to solve it. Empathy Empathy refers to being able to understand a situation from other’s points of view, to accept the differences of individuals and to support others whenever possible. The ability to empathise with other people, not only in a family, can help your children adapt easily in various environment and cultural backgrounds without judgements and critics. Nurturing empathy in children can also develop the ability of observation and caring of them. How to develop empathy in kids? Respect and treat your children as individuals that are unique with their own personalities. It is essential to encourage kids to speak out their opinions, feelings and emotions. This will help your kids recognise things they have in common with others and be able to relate to them naturally, and also things they are different from others and accept them as they are. Resilience No matter how intensive your protection is for your kids, it is certain that there are possible and unexpected pain, failure and disappointment in life, which your children are facing at some points. Instead, it is vitally important to teach them early about failure, how to learn from failure and how to cope with situations that are unexpected. How to develop resilience in kids? Allow kids to be fail in daily activities and their responsibilities, and explain to them why they failed and help them acknowledge their feelings when failure happens. You should not avoid or minimize their feelings according to your age and experience. After your kids get aware of their emotions, ask them what could be wrong and encourage them to try again with new solutions. As a parent, you should always be supportive and empathy, and eventually a role model for your children to look up to and follow, which benefits your children in the future. Parenting is tricky and requires a lot of effort and patience. 15 Quotes to Teach Your Kids about Money 1. You’ve got to tell your money what to do or it will leave. -Dave Ramsey 2. Money doesn’t change men, it merely unmasks them. If a man is naturally selfish or arrogant or greedy, the money brings that out, that’s all. – Henry Ford 3. You can only become truly accomplished at something you love. Don’t make money your goal. Instead, pursue the things you love doing, and then do them so well that people can’t take their eyes off you. -Maya Angelou 4. Investing should be more like watching paint dry or watching grass grow. -Paul Samuelson 5. Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. -William A. Ward 6. A successful man is one who can lay a firm foundation with the bricks others have thrown at him. -David Brinkley 7. Without continual growth and progress, such words as improvement, achievement, and success have no meaning. -Benjamin Franklin 8. Do the one thing you think you cannot do. Fail at it. Try again. Do better the second time. The only people who never tumble are those who never mount the high wire. This is your moment. Own it. -Oprah Winfrey 9. If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed. -Edmund Burke 10. Too many people spend money they haven’t earned, to buy things they don’t want, to impress people that they don’t like. -Will Rogers 11. Every time you borrow money, you’re robbing your future self. -Nathan W. Morris 12. Time is more valuable than money. You can get more money, but you cannot get more time. – Jim Rohn 13. The speed of your success is limited only by your dedication and what you’re willing to sacrifice – Nathan W. Morris 14. Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while. – Jack Welch 15. I made my money the old-fashioned way. I was very nice to a wealthy relative right before he died. -Malcolm Forbes If you want to see your child succeed, you need to show them the connection between today’s planning and tomorrow’s opportunities. As an adult, it’s easy to look back and see how your choices in school influenced where you are today. But think back to your younger days. The future impact of your daily choices probably wasn’t as obvious to you back then. I hear students of all ages saying things like: “Hey, it’s not that serious” or “My grades aren’t that serious” or “How I act in school is just not that serious.” Listen—it is that serious. And one of my favorite ways to challenge the students I meet is by explaining how the choices they’re making today will be a serious factor in the caliber of their future. LAURA’S STORY Let me tell you about a friend of mine named Laura. I met her one day a couple of years ago while I was working out at the gym. Use the best tools to teach your kids about money. I was doing my usual routine, working hard on the treadmill, when I noticed this woman in front of me on an elliptical. In fact, it was tough to miss her. She was going even harder than me, spitting and sweating and attracting a lot of attention. Laura was exercising so hard that everyone was laughing at her. She was something to see! But I’ll never forget how she had this determined look on her face. You could tell she had a goal in mind and she was not going to quit. As we were exercising, two young girls walked behind us. I overheard one of them say, “It’s not that serious.” IT’S THAT SERIOUS When Laura took a break to go for some water, I was right behind her. There had to be something important going on in her mind to inspire all that business. “Are you okay?” I asked her. She said she was fine, and in fact she was feeling better all the time. “Anthony,” she said, “if you’d seen me a year ago, you would know why I’m working so hard today. Last year I weighed over 300 pounds.” Laura told me about a pivotal conversation she had with her doctor and her mission to lose weight. “When my doctor asked how I felt, I said I felt great,” Laura said. “He told me, ‘You may feel great, but you’re definitely not doing well. In fact, you’re at serious risk of a heart attack.’” That’s when it hit her how serious her situation was! She realized she needed to make some major changes. “I’ve been getting here every single day and getting on that machine,” she said. “And I don’t care if anyone else is laughing at me, because I’ve got to do what I’ve got to do to get healthy! I am going to live!” SIMPLE BUT SERIOUS: MOMENTUM OVER TIME The day Laura’s doctor asked about her health, Laura didn’t know she was on the verge of a heart attack because she felt fine. Her new choice was simple but serious—she had to decide whether to live her life based on how she felt that day or to live with the future clearly in her mind. Here’s where you and your child come in. A series of poor choices has the potential to lead any of us in a bad direction and toward painful consequences. But it doesn’t have to be that way! Good decisions over time can lead to great rewards! For instance, saving some of your money instead of spending it all or practicing good study habits instead of blowing off your schoolwork. I’m still in touch with Laura. You’ll be happy to know that today she weighs in at a far healthier weight. If it wasn’t for her decision several years ago to take her health seriously, she could have died. But she decided: Today is the day. It was something serious enough to convince her to do whatever it took to live. The choice to take your future seriously is one we each face every single day. And the same is true for your child. As a parent, help them to see that the choices and goals they’re making today will impact who they are tomorrow, next year and for the rest of their life.
