Instilling
good money habits
in your children is arguably one of life's most important lessons.
Fortunately, with today's technology, there are many ways to make
learning about money fun for kids of all ages.
Teaching your kids
about money should start as early as possible. "As soon as your child
starts asking for things, I think it's time for them to understand that
things cost money," says Anton Simunovic, founder of ThreeJars.com, a
website dedicated to teaching kids about money management.
But what
lessons should you start with? Neale Godfrey, author of
Money Still Doesn't Grow on Trees: A Parent's Guide to Raising Financially Responsible Children, suggests beginning with the concept that money must be earned. "There's no entitlement program in life," she says. "
Kids need to know that they can't just whine for a toy in a store and automatically get it."
As kids begin to learn about money, parents shouldn't feel intimidated. "The
topic of money shouldn't be something that's taboo," says Jayne Pearl, author of
Kids and Money Guide to Learning Capital. If you're uncomfortable talking about it, she says, it won't be an enjoyable experience for the kids.
You
should also be careful not to argue about money in front of your kids.
"If the parents are constantly arguing about money, their children are
going to view money as a source of stress," says Jon Gallo, who
coauthored the book
The Financially Intelligent Parent with his wife, Eileen.
Starting to feel a little less anxious? Here are six more ideas for making money fun for kids:
1. Use cash. "Let your kids hold the money
and see the money leaving their hands."
2. Utilize a piggy bank for the 21st century.
A traditional one-slit piggy bank doesn't teach kids much about money
management.
"A lot of
times, piggy banks make kids very distrustful," she says. "If kids can't
see through it, they don't trust that the money is in there." So
Beacham developed the Money Savvy Pig, a see-through piggy bank with
four slots: save, spend, donate, and invest. With the Money Savvy Pig,
kids learn that money isn't just accumulated to buy things.
3. Take advantage of the Web. The Internet is full of age-specific money games for kids. Just last year, Sesame Street and a bank teamed up to create
fun videos and games that teach kids about money. Many children will find it easy and exciting to learn about money from Elmo and his friends.
Pearl recommends Doughmain.com, which has an array of child-friendly tools and games centered on money.
4. Let them play games.
Beacham says games are an excellent tool for approaching the topic of
money with kids. "Games become something you can use to open the
discussion, so it's not always you preaching about money," she says.
Grade-school children can play Planet Orange at OrangeKids.com. In the
game, kids travel through the planets by completing certain jobs to earn
money for gas.
MassMutual, a financial advisory group based in
Springfield, Mass., developed Save! The Game, an app for the iPad and
iPhone that teaches kids the difference between wants and needs—a
critical financial lesson, says Pearl.
However, Simunovic of
ThreeJars.com expressed one concern: "I'm not a huge believer that games
are going to teach our kids a whole lot about the way money is used in
the real world."
5. Empower them to manage their own money.
Let your child play an active role in how money is used by offering
them an allowance. But consistency is important: Many parents promise an
allowance to their kids but don't deliver. If parents forget to pay the
allowance, children learn that money promises can be broken. Beacham
says this can potentially lead the child to think somewhere down the
road, "Hmm, maybe I don't have to pay my credit-card bill on time this
month."
Pearl adds that while an allowance can be tied to certain
household chores, it shouldn't be used to discourage bad behavior
(i.e., for every day you don't kick your brother, I'll give you P10).
6. Encourage them to give back.
Giving to charity is fun for kids because they are instinctual givers,
says Beacham. In addition to having your child donate money (to a
charity of their choice), make philanthropy more enjoyable by getting
the whole family involved. Volunteer together or participate in a
fundraiser at the neighborhood park.
Above all, don't be afraid
to talk to your kids about money. Says Godfrey: "Our kids see us
handling money every day, but we often forget to talk to them about what
we're doing."
By 
