7 creative ways to teach kids about money
Here's some expert advice on clever ways to build a foundation that will (hopefully) last your children a lifetime.
This post comes from Aaron Crowe at partner site Money Talks News.
When Lori Mackey used to pull into a gas station, her children would often ask her for money so they could buy candy. Mackey, being a financial literacy expert, turned it into a math problem and a chance to learn about money. She gave each child $1 and told them to come out with as much candy as they could.
So instead of buying a candy bar, her son and daughter would buy less expensive pieces of candy, all while doing math to see how much they could buy for a buck.
Her daughter (now 17) and son (now 15) learned some creative ways to spend a dollar, They also eventually learned how to save money for short-term and long-term goals, as well as the importance of investing and donating their money.
Mackey, who founded Prosperity4Kids.com to help kids and parents learn about money, says being creative is the best way to get children to learn about finances.
"The most important thing for parents is that this is lifelong," she says of financial literacy.
She recommends what's called the "10-10-10-70 principle," with 10% of any money a child earns being put into giving, investing, and saving for a long-term goal or for emergency needs, and 70% into saving for the short term or spending wisely.
When you're young, keeping 10 cents of every dollar for a long-term goal such as college is an easy habit to get into and should lead to saving money later in life, she says. "Most kids, you give them a dollar, and they'll go out and spend a dollar. ... You really need to take these 18 years and teach them about money management and finances." Post continues after video.
Here are six more creative ways to teach your children about money:
An allowance is the best way to teach kids about money, but only if tied to chores, Mackey said. The work could also teach them what type of work they want to do in the future. Her son discovered quickly that he prefers selling things to make money instead of doing physical labor.
Coupon clipping. Donda Combs, a financial wellness speaker whose seminar topics have included how to raise money-savvy kids, says she used to give her children the newspaper and tell them to clip the coupons of anything they recognized that the family normally purchased. If they went to the store with her and brought and used a coupon, she gave them the cash back for using the coupon.
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