September has come at last, which means kids are back in school and routines are back in place. However, learning doesn’t stop when your kids get home. The time you spend with your children can be valuable teaching moments for life skills like managing money. The more you share with your children about the value of money and how to use it, the more financially responsible they will be when they get older. There are many age-appropriate ways to instill the value of money management to your children, and we’ll share some of our favorites here! Read on for some strategies on teaching your children to manage money.

1. Save Money for Something Specific

Starting your children young with piggy banks is a great, tangible way to show them how small amounts of money can become bigger over time as they add to their savings. If there is a specific item your child wants to buy, helping them put away money over time in order to purchase that item helps them understand in a concrete way the value of different amounts of money and what it can get you.

2. Give Them a Budget

Even at a young age, you can give your children a budget when you take them to the store. They want a prize? Great! The prize can’t be more than x-amount of money–whatever you have predetermined to be an appropriate amount. Help them look at price tags and see for themselves how much toys, accessories, clothing, and whatever else they might want costs. They’ll quickly learn the difference between bigger-cost items and affordable items, and will gain an understanding of the value of responsible spending. 

You can also share with them that more expensive items are not necessarily never affordable, but perhaps are not appropriate for random trips to the store. Special occasions like birthdays or holidays might warrant a bigger gift, and they can take note of something more expensive they might want in order to ask for it at one of those times. Additionally, if there’s a more expensive item they can’t stop thinking about, you can help them come up with a savings plan in order for them to purchase it themselves.

3. Have Them Earn Their Allowance

You may be tempted to give your child a certain amount of spending money per week or per month no matter what they do. However, the money will mean a lot more to your child if they have earned it doing chores, babysitting, or in other small, age-appropriate ways. Gordon Ramsey talks about the value of work at any age. Even young children can do simple tasks like make their beds, put their clothing in the hamper, and clear their place at the table. 

You may not want expected household chores to always be about getting paid, as you want to foster an environment where your child takes some responsibility in the family. However, there could be some chores deemed as “extra” (such as helping to clean up an area of the home where your child did not make the mess, etc.); these chores can earn them some cash that they can either spend or save.

As your children get older, they can take on small jobs in the neighborhood–babysitting, shoveling snow, tutoring, dog walking, and so on. This money will truly be money they earned themselves, and it also enhances their sense of community. When your children earn their money, they will tend to act more responsibly with it than if it is just given to them. This is because they form a deeper understanding of how earning money is not necessarily easy or guaranteed. Money won’t fall into their lap–they have to do something to get it.

Of course, you will continue to provide for their needs. This earned money is more for educational purposes than to really expect them to provide for themselves, but the lesson will still be learned. Plus, if there’s an item they really want to splurge on, you can encourage them to put away their earnings until they have enough to buy what they want. They may even reassess what they want to spend their money on and be less inclined to impulse buy.

Money management does not have to wait until you are old enough for your first adult job. Teaching your children to manage money from a young age will give them financial intelligence and a sense of fiscal responsibility by the time it truly matters. At DeSantis, Kiefer, Shall, & Sarcone, we are always available to help in all areas of money management, so don’t hesitate to reach out to us at any time!