So, Hamilton will remain our “ten dollar founding father” and Harriet Tubman will be on the $20. Seems like a good week to talk about money…Oh, I made a rhyme! 😉

“Mom, I want (insert item du jour).”

How many times have you heard this? How do you respond? How do you teach kids that money does not just magically appear…although that would be awesome if it did? Here are some tips to help your kids learn financial responsibility.

First and foremost, explore your relationship with money. Do you and your spouse talk about money? Does it create conflict? If so, why? How did your upbringing influence your spending habits? If you are uncomfortable talking about money, then it will make teaching your children even more difficult.

Talk about money. Do not make it a taboo subject. A good approach is to use real world lessons. After all, we spend money most every day and each time represents an opportunity for discussion. Talk about why you use coupons at the store, or the monetary cost of wasting food, or the benefit of buying the larger tube of toothpaste. View these as teaching, not preaching, opportunities.

Discuss the difference between wants and needs. This also helps to foster gratitude and thankfulness. Your child may need a new folder for school yet they do not need the more expensive Hello Kitty one even though they might want that one.

Teach your child to earn money. This can help them to earn for some of their wants, as referenced above. You may choose to give them an allowance for chores. Or for younger children, if you use a behavior chart, each sticker can represent a dollar amount and when they reach a certain amount they can cash in their “money” and spend how they choose. Be creative on this one.

Encourage your child to save. This applies to both money earned and money received as a gift. Within this conversation teach about interest as well, so your child understands that saved money is earning money. For older children you can open a savings account for them. For younger children, you can have two piggy banks, one for savings and one that represents interest. If they put a dime in the savings one then you can put a penny in the interest one.

Help your child to budget/spend wisely. While grocery shopping, you can discuss name brand versus generic items and let your child choose, noting that if they spend on the name brand item that is it for their budget while if they spend on the generic item they may have enough in the budget to purchase a candy bar at the checkout. Again, be creative.

Focus on experiences as rewards. Research shows that experiences bring greater happiness than material items. Of course your children are going to want things and you are going to want to give many of those things to them. That is okay. Yet life should not be focused on material items. Think about, if you want to reward your child for their grades, you could buy them a new toy yet what about taking them out for ice cream instead.

Do you have additional tips for helping kids learn about money? Please share.