Money management is a very important part of a responsible adult life, yet waiting until adulthood to figure everything out is not a good idea.  If we teach our children some basic money principles while they are young, they will be set up for success down the road.

For children under the age of 10, helping them understand the value of a dollar may be challenging.  Here are a few helpful tips:

• Teach your small child the value of saving money by encouraging them to keep a piggy bank. Better yet, use a clear container so they can actually see the money they’ve collected.

• Continuing with teaching the value of money, assist your child in using some of the money from the jar to purchase something at the store. Grabbing a few coins or a dollar bill, taking it to the store to buy a small item, and paying for it themselves will reinforce the purpose and importance of money.

• A fun idea for children of any age could be a simple trip to the grocery store. Plan your shopping list together, decide how much money you have to spend, then shop wisely as you add the cost of each item before reaching the register.  This is a concrete way to teach the importance of staying within an agreed upon dollar amount.

• In addition to saving and purchasing, talk to your child about giving. Whether you pull from that jar of money and take it to church or you give to a local charity, instill the value of giving from abundance at a young age.  What better way to teach our children to recognize how very blessed we are as Americans than to teach them the importance of giving to the church and to those less fortunate.

For children over the age of 10, the concept of money becomes a little less abstract.  Especially when children reach the teen years, learning how to handle money is a valuable task.  Here are a few options to consider:

• Set up an allowance system with your child. Your family may want to connect an allowance with household chores, so the child sees the significance in being paid for a job well done.

• For older children, set up a bank account and teach them about planning their spending, particularly for their entertainment. Have discussions about how money is deposited at the beginning of each month, what activities are coming up that need to be paid for, and how spending has to stop when the money runs out, until the next deposit is made.

• Lastly, encouraging your older teen to find a job will help develop the value of working hard and earning money on their own. A part-time summer job can also teach the value of saving by providing future spending money for college or to help purchase a first car.

It is easy to hand our children a ten or twenty dollar bill every time they have an activity pop up or want to go out to lunch.  However, we would be missing the opportunity to impart wisdom and teach best practices of money management.  Becoming a good steward and well-disciplined money manager is like most other lessons we learn in life – the best lessons are learned when we are young.

If you are interested in digging deeper into teaching kids about money, here are a few resources for you.

FInancial Peace Junior Kit (for kids 3-12)

Smart Money Smart Kids: Raising the Next Generation to Win with Money.