What is kids money managing? When do kids first become aware of money? What do kids know about money?
Kids money managing comes from you. Kids watch their parents all the time. After all, we are their role models. They watch us as we spend our money. They watch us as we save our money. They watch us like hawks! ;o)
Everything you do with money heightens your kids money awareness. Everything you do with money shows your kids what money is. You teach your kids the value of money. When you invest and donate your money, you are strengthening your kids money management skills. You are their money coaches.
The definition of a “coach” is a “private instructor.” Surprise! Surprise! Yes, among all your other jobs as parents, you are also private instructors. You are responsible for nurturing kids money managers.
Most of the time when we pay for items, we use credit cards over cash. It’s easier and we can keep better track of where our money went when those monthly statements come in to be paid.
However, credit cards give kids a false sense of immediate riches. Out comes this plastic card, it’s swiped and presto we take our purchases. To kids this must seem like magic. After all, when the credit card statement comes in to be paid, we usually don’t show our kids that now we are going to write out a check to pay for the items we took earlier in the month.
You can do that, you know. A better way might be to pay for items using cash, especially when your kids are young. Then they see the immediate connection between money and the items we are taking. You have encouraged good kids money managing and placed your kids on a path of sound money spending. Pay as you go! ;o)
You can also explain to your kids about interest, especially the magic of compound interest. You put money into a bank’s savings account, and that money earns interest. Then your initial money and interest earn interest which is compound interest. Your money grows and grows. It looks like magic (but we know it’s not).
Explain to your kids that when you don’t pay your credit card statement balance in full, there will be a balance due. Then the credit card company can charge you interest. That interest will compound too so it’s better to pay your credit card statements in full. Only you should be paid compound interest. You don’t want to pay compound interest. ;o)
So how money savvy are your children? Here’s a FREE quiz “ How Money Savvy Is My Child” where your children, by answering seven questions, will find out if they are a “wealth master,” “fairly money savvy,” “not quite money savvy yet” or “money savvy deficient.”
Kids money managing is a direct reflection of how you manage money. Don’t be alarmed if your money managing isn’t up to speed! ;o) You can learn right along with your kids.
Here’s to creating exceptional kids money managers!
Cheers … Amanda van der Gulik … Excited Life Enthusiast! ;o)
P.S. Here are some more fun and valuable teaching tools I found to help your kids learn about money! Enjoy! ;o)
(Simply click on the photos, it will open up a new window, to take a “sneak peek” inside them!)