Summer 2006 Volume 3, Number 2

Involving Children in Money Management

Sandra McKinnon, MS
Family Financial Education Specialist
University of Missouri Extension
636-583-5141
McKinnonS@missouri.edu
 

How did you learn about money? Hopefully it wasn’t through the school of hard knocks.

When it comes to teaching kids about money, the sooner the better. Long before most children can add or subtract, they become aware of the concept of money. Adults have the first opportunity and first responsibility, to teach money management principles. Seeds planted early bear fruit later. How is your behavior and attitude toward money influencing the children in your life? Children see adults get money magically from the ATM; they see adults grimace and mumble as they pay bills at the kitchen table.

So how can an adult help a preschooler, a school-ager or a teenager become responsible with money? Try some of these ideas on ways to teach money concepts of earning, spending, saving, borrowing and sharing.

Hold a family council meeting – explore beliefs, values, and wishes. Voice complaints, ask questions, and give suggestions. Many times inadequate communication about money is the reason for arguments. Be sure to talk things over. Plan a vacation or work on a goal, such as purchasing a new refrigerator, together.

Participate as a family in philanthropic activities in your community. Small children learn by touching, not just talking. Give your preschooler a choice among three items at the store. Accept the child’s decision. Then let the child hand the clerk the money.

Most experts agree that giving a child an allowance gives the child experience with making money decisions, and then living with them. Avoid paying for good grades or good behavior. Do not tie the allowance to chores. A family shares the workload.