Money Smart Kids

Ding! Ding! Ka – Ching!

We found a dollar bill screamed all three of them. It was as if they had won the lottery because they were fighting to put it in their piggy bank. I quickly grabbed the bill out of their hand before they were going to rip it apart. Since they all discovered the bill, I had to give them each a dollar bill for their piggy bank, more than what I usually give them.

Raising kids in today’s world does seem easy but it comes with a lot of teachings and cautions. We want to give them the best opportunities so that they can succeed ahead in life. However, often at times we are confused at what age to start giving them valuable lessons in life.

One such lesson is money. What age is right to teach kids about money? How do you go about teaching them money lessons? Will we make them stingy kids if we teach them too early about money? How will they learn to value money?

Quite a few questions pop up in our mind as how to go about this and there is no right or wrong answers. I think its all about timing.

Another question that pops in my head is do schools teach kids about money? I feel that a lot of us tend to depend on the school to teach our kids money lessons but we forget that we have to teach the basic ABC’s of money first.

Money management can start from an early age. In general, kids are smart enough to figure out what they need whether it may be using a phone or iPad. So, why underestimate our kids. Why not start them early on this journey.

Once the kids are in a playgroup or preschool, which is around 3 years to 5 years, you can start by having them count numbers. You can introduce them to piggy banks. By counting how many coins they have in their piggy banks you can start introducing the concept of money.

Also, I made sure that I got the piggy bank of their choice so they would be excited to collect coins in their piggy bank otherwise they would lose interest.

By 5 years, you can start introducing money like  1cent, 5cents, 10cents, and 25cents. I am still teaching this to my girls. I am having them feel and look at the different coins and know how they differ.

Then from 6 to 8 years, it is a good idea to start with pocket money. I started with giving Aarav 50cents a week on the condition that he would behave good the whole week or do some good deed like helping someone. Soon, the girls were like what about us.

By regulating pocket money for kids, it really helps them learn money management. Kids get very tempted when they see other kids have something new. Similarly, everytime Aarav would see the new gel mechanical pencils his friend had, he wanted to have them. Therefore, I would tell him to keep collecting in his piggy bank and when he has enough money, he can buy the same pencil. He realized that after weeks of hard work, he earned the pencil.

Aarav did contemplate whether he should save the money for the future or buy the pencil since it was his hard work through which he had collected the money. This teaches them how hard it is to earn money but at the same time decision making. It also helps our kids stay grounded to reality of money management.

At the same time, teaching our kids to donate is very important. It teaches them to be selfless, be helpful towards others and understand that money is a luxury that is earned through hardwork. On any special occasion like their birthday, the kids will take money from their piggy bank and decide to give it to any homeless person on the street. My aim is to get them to donate at least twice a month to either a homeless person or any organization.

Recently, Aarav expressed his opinion of opening a bank account and having a credit card of his own. I was taken aback because I am like how old are you again. But somewhere, I felt that maybe introducing him to the bank system is not a bad idea. If he is ready to learn new information, then why should I stop him.

Therefore, I believe that after age 9, you can introduce to them banking. You can open an account for them in which they can deposit their piggy bank money into or any other monetary gifts in that account. I probably would not let him withdraw anything from that account till he is 18, but this way he is aware of what it is like to have a bank account and how to manage it.

It may sound a little too advanced for a 9 year old, but at the same time, there is no harm in introducing the bank concepts a little earlier on.

Once they are in their teens, you can introduce them to different concepts like credit, debit, savings etc. Even concepts they learn in school like decimal, percentage and others if we can provide practical examples then it will make their understanding stronger.

For instance, when we go shopping, lot of times it will be like 20% of the price and most of the time we have to calculate it on our own. Therefore, if we can get our kids to be strong in their basic calculation then they only will reap the benefits.

A lot of times as adults we are expected to know credit, debit and all this terminology, but no one really has explained it to us thoroughly. It is like how can you not know it. Therefore, why not prepare our kids for the world out there by taking baby steps.

We need to teach our kids to learn to swim in this pool of money management instead of just pushing them into the pool and expecting them to learn to manage it. This is a whole cycle of working hard, earning money, and concluding what to do with the money.

In the end, we want to make it fun for kids to learn about money and there are plenty of ways to make money your kids buddy.