Helping Kids and Teenagers Make Smart Money Choices

Overspending is a trap we often fall into, thanks to the powerful advertising on social media that seems to know our desires better than we do. Whether it’s emotional spending, trying to keep up with others, or losing track of our expenses, the temptation to overspend is real. That’s why teaching kids to be smart with money, especially when it comes to spending wisely, is crucial.

By taking the time to teach your kids about money, you’re giving them a better chance to enjoy financial wellbeing as adults. But where do you start?

Handling money

Start by involving your kids in financial decisions and giving them the responsibility of handling real money. Researchers at Cambridge University found that children develop financial understanding through personal “economic experiences.” Here are some fun activities for different age groups:

Toddlers to Age 5: Cash Register or Shopping Games

Play cash register or shopping games to introduce the concept of money. Create shopping lists, practice paying for items, and count change. It’s a fun way to teach basic math skills to.

5 to 10 Year Olds: Fruit Shopping Challenge

Give your child a small amount of money at the supermarket and let them make choices about what fruit to buy within a set budget. They’ll learn about decision-making and the value of money.

Pre-Teens: Weekly Shopping Planning

Assign your child the task of planning one category of shopping for the week, like fruits. They can create a list, look for specials, and try to stay under budget. If they save money, they can keep the change.

Teenagers: Real-Life Money Responsibilities

Give your teenagers real money responsibilities in the household. Let them find the cheapest petrol or search for better electricity deals. Reward them with a portion of the savings they find.

Stick to a budget

To foster financial independence, teach your teens the importance of sticking to a budget. For example, have them select and pay for their own phone data plan. If they go over their allowance, they’ll have to make sacrifices, reinforcing responsible spending..

Becoming wise with money

Remember, making mistakes is part of learning. Instead of bailing your children out, use overspending as a valuable lesson. Show them smart money habits by discussing your choices and explaining the reasons behind them. From shopping for affordable brands to comparing prices, involve them in the decision-making process.

Role model smart money habits

As well as learning by doing, kids learn by watching and listening. It’s helpful to role model and explain the types of healthy money habits you’d like them to develop, and to start conversations about the choices you make with money.

By teaching your kids about money and empowering them to spend wisely, you’re setting them up for financial well-being in the future.