How to Teach Your Kids the Value of a Dollar
As a homeschool mom, especially one passionate about my money, I start teaching my kids about money very early.
It takes them about 2 years to learn that money exists and that they can buy things with it. And that’s when I start talking to them about priorities and budgeting.
Read all the way to the bottom--I have a bonus idea for you!
Talk to your kids about priorities
Kids have no idea that money is a single-use, finite resource. They think it’s just there and endless. When I tell my kids they can buy something, I tell them what their budget is and I show them what fits in their budget. Then I give them ample time to choose and If they don’t seem interested, I may suggest something different for the same price--you can even give them the option to save their money to get a more expensive item later.
The important part here is that you make them choose. How can you do that? Talk to them. Ask them questions like:
“What do you want more x or y?”
“What would you have more fun with?”
“Which one can wait until next time?”
Get them comparing their choices and thinking about what they really want, about what their preferences are. Get them thinking about seeing their purchases as an investment instead of simply an endorphin rush.
Kids don’t have a frame of reference for price, and they won’t fully develop the ability to understand that for a long time. However, the more you talk to them about price and how it compares to others, the more they will understand as they grow.
There are two easy ways to do this:
- Talk about price when you shop.
- Get them used to hearing how you make decisions based on the price and quality of things.
Include them in your budgeting process
Kids definitely don’t think about having to pay bills, so it is never too early to sit down with them and show them what percentage of your check goes to their everyday necessities like water and electricity. It’s always fun to explain how expensive a car really is once you include insurance, gas, and maintenance in the price tag!
As a mom of a large family, I am slowly starting to turn over the kitchen mess to my oldest. I want him to learn to cook and keep a kitchen clean, and soon I will include meal planning and grocery shopping, too! This way, he will be the most prepared when he moves into his first apartment and already has plenty of experience grocery shopping. No surprises for him!
Support your child in starting a small business. It can be as simple as selling popsicles and drinks at a park on a hot day. Give them first-hand experience with buying stock, pricing it, selling it, and ensuring their customers are satisfied.
Let me know if you are interested in hearing more about how kids can start a small business!