Written by Lucy Wyndham
Many of us don’t feel comfortable talking about money with our friends, partners and especially our kids. Only 22% of kids regularly talk about money with their parents. But while it may not be our favorite topic, teaching children about money can really help to set them up for the future and above all, avoid many of the financial mistakes we’ve made. Given that the average American has a personal debt of $38,000, wouldn’t you want to help your kids avoid that?
Use Tech to Teach About Money
Your kids may already be attached to some kind of digital device every time you look at them, so why not use it to your advantage? If you find it difficult to talk about money, or you just don’t know where to start, then there’s a huge range of financial technology that can help teach children the basics about money. There is an array of fun money games and apps now available that have been designed specifically for children and young people. Do a bit of research first to find the right one that’s most suitable for your child and then let them play. It’s a great way to get them learning about money without them even realizing.
Give Your Kids Three Budgeting Pigs
While learning about money and saving is great, putting it into practice and actually having to manage their own money is where your kids will really learn. While kids last year received an annual allowance of approximately $471, what did they do with their cash and do they have anything to show for it? Probably not. So take it right back to basics and give them three piggy banks. One, they will be used for savings, the second for spending and the third is for donating. Each time your kid gets some money, they have to make the decision as to which pig gets the cash. It forces them to think about their priorities while learning that once they have spent their money, it’s gone for good.
Use Apps to Track Spending and Saving
If you think your kids would respond better to using tech to save, then FamZoo helps kids from preschool age up to college to learn how to manage their money. The app costs $40, but it keeps track of chores and allowances, while also providing a prepaid card which your kids can use to spend with. Alternatively, you can use the Allowances & Chores Bot, $3 or free for the basic version, to pay your children for their chores without giving them cash. You can set their chores on the app and then either choose to pay them manually or automatically. If the children wish to purchase something using this money, or you buy it for them, then the app enables you to deduct the amount from the balance.
With many adults today struggling with debt and no savings, teaching your kids to be smart with money sets them up for a healthy financial future. Whether you give them traditional money banks or access to money-saving apps and spending trackers, giving them the right tools and information to make good financial decisions is one of the greatest gifts you can pass on to your kids.