Creative, Fun Ways to Teach Your Kids About Money

By Lynnette Khalfani-Cox, The Money Coach

As a Money Coach and mother of three young children, I’m always looking for creative, fun ways to teach kids about finances. Unfortunately, some adults view money issues as overly complex, boring, or even taboo topics. Those attitudes toward money are easily transmitted to kids – overtly or subtly. To help children develop a healthy perspective about money, and avoid the money mistakes we’ve all made, try some of the following strategies.

For Toddlers 2 to 5 Years Old: Sing Along With Mommy (or Daddy)

When my two-year-old daughter began waking up each morning and asking: “Watch Barney?”, my husband and I initially regretted our decision to buy those Barney DVDs. My older two kids, after all, weren’t allowed to watch cartoons – or any television at all – until after they turned two years old. (Like most parents with several children, I suppose I’ve become more permissive over the years).

But instead of banning Barney, I decided to learn why my little one was so enthralled by this big, purple dinosaur. When I started watching the show with her (something I previously couldn’t bring myself to do, leaving that task instead as a “Daddy duty” for my husband), I found that she was most excited about the music featured in the program. Not just Barney’s “I Love You” theme song. My daughter was actually learning a host of good values – about manners, sharing, healthy eating, exercise and so on – all through songs. So why not, I thought, teach her about money with a song? That’s when I realized that some of her favorite songs and games already related to numbers, counting and yes, even money.

Among them:

• “One Two Three Four Five … Once I caught a Fish Alive”
• “Five Little Monkeys Jumping on the Bed”
• “The Ants Go Marching One-By-One”
• “One, Two, Buckle My Shoe”
• “Bought Me a Cat”

Now I make up money-related and counting songs – the sillier the better. A “Sing Along” with props – anything from stickers to cookies to stuffed animals – helps tangibly illustrate concepts. I figure whatever conveys a healthy outlook about money, promotes delayed gratification, or teaches that money and other rewards are earned, are good starting points. But make no mistake: my two-year-old is also aware of an abstract concept: that money has value. For example, if I give her a bill, she will say “Dollar” and immediately put it in her pocket. Who knows how my youngest child will handle finances in the future? For now, though, I like to think that my daughter is a budding saver.  

By the way, if you think it’s way too early to start introducing money concepts at this age, think again. Toddlers are remarkably astute and eager to learn. They’re making sense of the world around them, and the fact is: money is a part of that world.

For Children Ages 6 to 9: Trade Places for a Day

Now that my son has turned 8 years old, he’s increasingly interested in demonstrating his maturity. Sometimes I give him extra responsibilities to foster his growing sense of identity. Here’s a twist on that idea: trade places with your child for a day. Pick a Saturday, for instance, when you have errands to run. Take your child to the gas station, the bank or the cleaners. Set guidelines, but allow your child to be “in charge.” At the supermarket, you might say: “We need nutritious snacks, along with breakfast, lunch and dinner for the week, and we have $100 to spend.” Then let your child figure out what to buy. Depending on your child’s math skills, let him or her run the numbers in their head, or use a calculator. With this activity, your child will learn how to save money and comparison shop, because he’ll understand that your family doesn’t have unlimited cash. Kids in this age category get a kick out of making “grown up” choices, which will boost their confidence about handling money and plant the seeds for making good financial decisions later in life.

For Adolescents Ages 10 to 15: Let Them Plan a Vacation

Teenagers – and the “tween” set – are incredibly savvy, especially with technology. They love email, instant messages or text messaging their friends, and almost anything involving the World Wide Web. This year, since my oldest daughter is now 10-years-old, I’ll tap into her Internet fascination by letting her plan a family vacation online. In the process, I hope she’ll become more financially astute. You can do the same thing. Taking your budget into consideration, let your teenager plan a family outing. It can be as simple as a day trip to a local venue, or as involved as a week-long vacation to a far-flung destination. The catch, of course, is that your child has to stick to a pre-determined budget. For my daughter, I’ll say: “We can only spend ‘X’ dollars on this trip.” Her challenge will be to scour the Internet, bargain hunt, and find a family vacation that the five of us can enjoy – all within our price range.

Young Adults Who Are 16 to 21: Poke Fun at Yourself

As teenagers turn into young adults, they face increased peer pressures and outside influences. Around this time, they also figure out – despite our best efforts – that parents aren’t perfect people who know everything. In fact, sometimes we can blow it royally. Good parenting involves being able to laugh at yourself – even your money mistakes. Your kids will better relate to you, and learn some practical financial lessons if you have the courage to tell them “the worst financial decision I made at your age” or “my biggest money mistake in my youth.” For my part, I have loads of embarrassing stories. Like the time I was in college and I bought a boyfriend a $350 leather coat for Christmas – instead of paying my car note. I paid dearly for that stupid mistake: my 1987 Hyundai Excel wound up getting repossessed. Then there was the time, at age 20, that I fell for an “advance fee” scam. Someone called over the phone promising $1,000 if I just paid a $250 fee upfront. I learned a whole set of lessons from that fiasco. When my kids are of age, I’ll share these and other tales from the trenches with them. Hopefully, they’ll chuckle at my past missteps – and avoid costly mistakes of their own.

Traditional ways to teach children about money – such as doling out allowances, or rewarding kids financially for exceptional accomplishments and stellar behavior – will probably remain time-honored techniques in many families. But by adding the strategies above to your repertoire, you’ll also make personal finances far more fun and memorable for the next generation.

[Note:  The content of the above article represents the views as expressed solely by the author, and may not necessarily reflect those of HSBC.  Further, the suggestions and recommendations contained within the content provided are not an assurance of any future result.  Should you need further assistance, HSBC suggests contacting an independent attorney, tax professional or financial consultant.]