How to Raise a Money-Confident Kid

You teach your kids their ABCs, how to catch a baseball, and even how to drive when the time comes. But what about being smart with their money? We all want the best for our children. Did you know that an early introduction to money concepts and skills can have a huge impact on their financial success as a young adult and into adulthood?

It’s hard to know where to start, especially if you weren’t taught money skills as a kid. Here’s your guide to helping your child feel comfortable and confident about their money.

1. Play games that involve money. Having fun while learning valuable money skills? That’s a win-win. Try playing games like Monopoly or Life to help them see the impact spending and saving money has on their game experience. Your child will be having fun while learning the importance of budgeting and planning for their future.
2. Make a wish list. Creating a set of priorities is essential in financial confidence. We can’t have everything we want, whenever we want. Sit down with your child and have them list five things they want. Then have them rank them from most important to least important. Once they have their list, break down the pricing of each item and challenge them to think about how they would budget to afford each item. If they get an allowance, try breaking it down that way. For example, if you want a $200 bike and get $20 a month in allowance, they would need to save for almost a year to get the bike.
3. Teach while you’re shopping. Next time you’re in the grocery store, actively include your child in the process, explaining why you’re choosing some items over others. When you arrive at the store, tell your child the budget you’ll try to stick to. If they’re old enough, have them keep track of your total as you add items to the cart. Remember, kids will learn from your example. Telling them about smart money habits is important, but seeing you in action is much more impactful.
4. Give an allowance. A monthly allowance gives children first-hand experience with money. They’ll learn the rewards of careful budgeting and the idea that once the money is gone, you can’t buy anything else. If you’re wondering how much allowance to give, there’s no one-size-fits all for every family. Some parents choose to give one dollar for each year of a child’s age. Other parents have the allowance based on chores completed around the house. Whatever amount you choose, it should work for both your child and your budget.
5. Involve them in major purchases. Going to Disney? Include your kids in the research and buying process. Have them help you compare hotels or flight options. It might seem like second nature to you, but shopping for the best deal when traveling on a budget is a new concept to your children. They’ll love being involved, and once you get to the resort, they’ll feel proud knowing they helped make the trip happen.

It’s never too early to help kids build good money habits. It just takes a bit of patience, planning, and some parental creativity. We’re here to help! Check out our money story-time videos for children here. By instilling these foundations, they’ll have a healthy relationship with money that they’ll take with them into young adulthood and beyond.

Content provided in part by GreenPath