Money doesn't grow on trees. It comes from ATMs.

What kids need to know about money

We're still in the early stages of discussing finances but I have done some thinking about this and here are the rules we currently go by:

  • Until kids can count there is little point talking about money
  • Until they get cents and dollars it's hard to talk about money in great detail
  • But this doesn't mean we should hold back - just skip the cents and replace large sums with meaningful alernatives so kids understand. Instead of: That toy is $14.89 and more expensive than the one that sells for $4.99 we can: This toy is double the money than the other one. We can then talk about doubles and quarters and lesses and mores and equals.
  • Explain very clearly in words they understand how money is earned and what we need to / can do with it once after we've earned it.
  • Explain savings, spendings and giving from the beginning
  • NO MONEY FOR CHORES, PERIOD. Chores are done because we are part of the family.
  • We currently give a weekly allowance of $1/age, so $7 for a seven year old.
  • She can do whatever she wants with that money but must split in into savings, spending and giving pile first.
  • Be open about family financials
  • Let them pay at stores
  • Talk about what a bank is and why they exist. It's great to do this via games that lego people play: the banker, the good saver, the bad saver, etc. They go to work and earn lego bricks and save/spend their bricks. We can go through several cycles of this (pay cycles) and see what happens to each lego guy and the bank.
  • This about sums it up. There are more suble details to is but I'm tired and will stop writing now. To be continued...