Easy Ways to Teach Your Kids About Money

Teaching kids practical skills about money is challenging. Part time jobs or chores show earning money is not free, but there is little incentive to budget or save. We also want our children to be ‘kids’ and enjoy their childhood without overwhelming them.

So, how can we teach kids about money in a fun and easy way?

Here are some ideas to consider:

Use Technology:

Online apps make it convenient and effective to teach money skills at different stages. Our kids are often more tech savvy then us, which puts them more at ease when learning online.

Some ideas include:

High School and College Kids:

Credit cards, car loans and student debt are buzzwords for teens. Many young kids focus on what debt buys, with little regard to the long term effects.

Online simulators show kids what happens after they get a car, attend college or go on shopping sprees. These sites also give lessons on choosing the most cost effective loans. Sites such as CreditCardSimulator tailor to newbies who have never had a credit card or auto loan. Kids can browse fictional cards with different APRs and fees. After choosing a card, you see what the monthly payments and total cost of favorite products would be, which may be startling.

Tips:

Start early! Parents and kids should use a college loan simulator BEFORE applying to universities. Yes, college can be an investment, but what colleges offer the best ROI?
Online tools help students see what they’ll be facing after graduation. For instance, does a $700 monthly loan payment justify a particular school? Can the same objectives be met with a $35O payment from a comparable college? This gives kids’ perspective on choosing a school that most meets their needs.
Don’t forget about camps and workshops. Many colleges or companies offer free online courses or meetups that prepare students for college life and debt. The USC Keck School of Medicine unveiled a summer camp that provides internships and a chance to meet with current students BEFORE applying to school. Funded by USC alumnus Elliott Broidy, the camp began in 2013.

Young Children:

Virtual worlds allow kids to learn about juggling scarce resources. Kids earn virtual money through games that buys cyber clothes, pets and toys for their avatars. If your kid wants a puppy and new clothes, they must prioritize their budget or earn enough to buy each.

Most sites connect children from across the world for interactive games and activities. You should review each site for online security and filters that prevent foul language or unruly behavior.

Tips:

Be involved to advise without making decisions for them. For instance, if a child has to choose between a puppy and clothes; ask what they feel is most important? They’ll likely say ‘both’, which forces them to make a money decision.
Some critics say these sites encourage children to cheat for more money. Of course, what parents feel is appropriate will vary. If a child cheats for quick cash to buy a puppy, you may ask if this is the right way to earn something. Parents who notice a pattern of ‘win at all costs’ behavior may check if it spills over into school, play or other real life activities.
Choose a site that puts your child in a position to succeed. Each child is different and some sites may have too little or too much to offer. If your kid is easily frustrated, a more basic platform may be a good way to build their confidence.