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5 Creative Approaches to Teach Kids About Earning, Saving, and Spending


Hey there, parents and guardians! Are you looking for fun and effective ways to teach your kids about money? You're in the right place! It's never too early to start money lessons for kids. In this blog post, I'll share five creative approaches to help your little ones understand the basics of earning, saving, and spending. Let's dive in and equip our children with the tools they need for a financially savvy future!


 

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teaching kids about money is step 1 in a literate future


Why Teach Money Lessons to Kids?


We believe that teaching kids about money is essential for building responsible habits and preparing them for the financial realities of adulthood. By instilling money management skills early, we lay a foundation for responsible, informed decision-making that benefits them throughout life.


  • Builds Responsible Habits: Teaching kids about money early on sets the foundation for responsible financial habits.

  • Prepares for the Future: Kids equipped with money management skills are better prepared for the financial realities of adulthood.


Now let’s dive into our 5 examples for how to teach kids about money creatively!  And don’t forget to take a look at the rest of our site if you want to learn about how we directly support the teaching of personal finance to kids!





kids doing chores to earn income

1. Earning Through Chores and Small Projects



Let's Earn and Learn!


Assigning chores and small projects is a great way to introduce the concept of earning. This method is not just about making money; it's about understanding the value of hard work and effort.  


A lot of families will just call this “allowance”, but we push back on that terminology a little.  We think it’s important to make sure kids know that they earned this income and it wasn’t just given to them!


One of the things to watch out for as well is which chores you’re assigning a monetary value to and which one’s you aren’t.  Each family is different, and it might be different per-child or during different ages - but there should definitely be some chores that are just done as being a part of the family, and some that are done for income.  


We tend to recommend basing the paid ones on more difficult or less desirable tasks, such as cleaning up the dog poop from the backyard, or mowing the full yard.  And the family chores can be cleaning up their room or shared living spaces.


Overall - the point is simple.  Let your kids earn income so they can then learn how to effectively manage their finances and their money!



How to Implement:

  • Age-Appropriate Tasks: Assign tasks like taking care of a pet or tutoring a younger sibling.

  • Not all tasks should be paid!  Some tasks should just be part of living within the household.

  • Reward System: Set a small monetary reward for completed tasks to simulate earning.  



Why It Works:

  • Teaches Work Ethic: Kids learn that money is earned through effort.

  • Value of Money: Understanding the effort behind earning money helps kids appreciate its value.






kids learning to invest, save, spend, and share

2. The Four-Jar System: Invest, Save, Spend, Share



Divide and Conquer Finances


The four-jar system is a visual and practical way to teach kids about managing money. It's all about dividing their earnings or allowance into three categories: Investing, Saving, Spending, and Sharing.


The order that we listed the jars in is also important!  We have other posts that cover this in detail, but let’s run through them at a high level.  


Investing jars are used for things that we want to build up towards in the future.  Think college money or “freedom money” (i.e. starting out in life outside of the parents house).  


The second jar is for saving up to short term things.  Think saving for a new bike or video game.  Generally you want this to be something that they can achieve relatively quickly, and often it’s good to have a visualization with it.  I.e. a goal chart so they know how close they are to their goal!


The spend jar is for immediate things.  In our adult lives this is rent, food, etc etc.  For kids it could be a fun snack at the store or small toy that they can buy.


And the last jar is for sharing / charity.  We think giving back to the community is one of the most important things we can; but this doesn’t have to be monetary!  Feel free to fill up the jar with volunteer ideas and “IOUs” for upcoming events.  Giving our time to causes is just as important as our money, and oftentimes it’s even more important!



Setting It Up:

  • Get Four Jars: Label them “Invest”, “Save”, “Spend”, “Give”.  (or whatever variation you want!)

  • Allocation: Teach them to allocate their money among these jars regularly.



The Benefits:

  • Budgeting Skills: Kids learn to budget their money from an early age.

  • Generosity: The 'share' jar encourages thinking about others and charitable giving.






understanding budgeting with children

3. Interactive Budgeting Activities



Make Learning Fun!


Who said learning about money has to be boring? Budgeting activities and games are an excellent way to engage your kids in financial education.


This one is a pretty simple concept and we’ve written a bunch about it before (check out one of those articles here), so we won’t dive too deep on this here.  Just know that budgeting is an important skill to teach, and teaching with games is one of the easiest ways to do it!



Activity Ideas:

  • Board Games: Games like 'Monopoly' can teach basic money management.

  • Online Simulations: Use kid-friendly financial planning games available online.



Why Games?

  • Engagement: Kids learn best when they're having fun.

  • Practical Skills: Games simulate real-life financial scenarios in a safe environment.






establishing savings goals for kids

4. Setting Savings Goals and Tracking Progress



A Goal in Sight


Setting tangible savings goals, like saving up for a new toy or a family outing, can be incredibly motivating for kids. It’s about teaching them to plan and save for something they really want.


A lot of times the best way to do this is with a visual tracker.  It can be a fun poster board idea, or you can use it as a way to teach your kids about spreadsheets!  Either way, they respond best when there is a visual representation of the work they’re doing and the savings they’re collecting!



Implementing Savings Goals:

  • Identify Goals: Help your child identify something they want to save for.

  • Progress Tracking: Use charts or apps to track their savings progress.



Why This Approach?

  • Motivation: Having a specific goal encourages regular saving.

  • Planning Skills: Teaches the importance of planning and delayed gratification.






learning about money through shopping

5. Real-Life Shopping Experiences



Shop and Learn


Involving kids in real-life shopping experiences is one of the most practical money lessons for kids. It's about more than just spending; it's about making smart choices.


We also know that children learn best by emulating their parents or the other adults in their lives.  So involving your kids in your shopping experiences is a great way to teach them about money management!


Think about all the times you’ve picked up something at the store, and then put it back because you didn’t need it this second.  Explain your rationale out-loud to your kids next time and give them the perfect real-world example of a “Needs vs Wants” discussion!



How to Do It:

  • Grocery Shopping: Involve them in making a shopping list and comparing prices.

  • Budgeting: Give them a small budget for their own purchases and guide them in making decisions.



Real-World Skills:

  • Money Handling: Hands-on experience with cash and calculations.

  • Decision Making: Teaches them to make informed choices and understand trade-offs.

  • Needs vs. Wants:  Help teach them to buy needs and save for wants; and to not make rash decisions while out shopping!






Conclusion


There you have it – five creative ways to teach your kids about earning, saving, and spending. Remember, the key is to start these money lessons for kids early and keep the learning process fun and engaging. With patience and consistency, you're setting your kids up for a future of financial responsibility and success.



Final Thoughts:

  • Be Patient: Learning about money is a process.

  • Stay Consistent: Regular lessons and discussions about money will reinforce these important concepts.




 

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