By Meghan, from Playground Parkbench
Raising children is no easy task. It’s our job as parents and teachers to prepare them to be successful, independent adults… and we only have a handful of years to do it!
One of the best ways to prepare kids for the future is by exposing them to real world experiences while they are still under the safety of your care. Giving kids an allowance provides an amazing real world, hands-on learning experience and platform for you to teach them about money.
Talk about money
While your kids do not need to know the details of your family money struggles, or how much your annual salary was last year, it is important that they understand the things they want have a monetary cost.
If your child can count, they are old enough to understand the difference in value between a matchbox car and a Power Wheels. It is also perfectly acceptable to respond to requests for toys or activities with an explanation of how much something costs.
Present them with choices based on cost comparisons. As an example, “Summer camps are expensive – we can only afford one week of camp. Which camp do you want to choose?” Once they start earning an allowance, you have an even more tangible way to talk about money.
Teach the value of a dollar
There is basic money math associated with the value of a dollar. There are countless ways to teach money to kids, but nothing is as effective as putting money they earn in their hands and allowing them to make their own purchase decisions. If their allowance is $2 per week, suddenly the new LEGO set costs them 10 weeks of allowance.
Instill work ethic
While it is important to convey money carries value, it is even more important to instill a strong work ethic at an early age. We all work to earn money and contribute to our families, and they should too. An allowance should not be a weekly guarantee – link it to a clearly defined set of expectations.
Set up a system that works for your family. You can assign specific age appropriate chores to your kids linked to their weekly allowance. Or make a list of tasks each assigned a monetary value that your kids can work to collect each week. Either way, make it clear that money is earned.
Setting goals and saving
There is no more rewarding feeling achieving your goals. Once you give allowance to kids, you can start meeting asks with, “That’s something you can save your allowance to buy.”
This reinforces the first three points above, while also gives them a goal and teaches the importance of saving. Remind them when they want to spend $1 here or there, they are working towards something bigger.
Want to give them a real world finance lesson? Tell them you’ll match their savings or pay them interest to help them achieve their money goals over time. You can use Learning Resource ATM to set up a bank, complete with personal ATM card. Let them deposit their earnings, track their balance and enter their withdrawals.
No discussion of money with kids is complete without talking about giving back. Whether you participate in a fundraiser for your school, or make monetary donations in your broader community, giving back is an important reminder for all of us, that no matter our challenges, there is always someone who has it even tougher. If we all give a little, we can help a lot.
Apply this in the classroom!
You can apply these same lessons with students in a classroom setting. Set classroom goals to earn and save for. The Learning Resources Teaching ATM Bank recognizes both real and fake coins, and use either to track your progress.
Did your parents give allowance when you were growing up? How do you teach your kids about money? Let us know at firstname.lastname@example.org, and if you enjoyed this post, check out these money-themed printables!
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