Have you ever caught yourself in the middle of the store wanting to disappear because your child won’t stop whining about the hot wheels car set, you just won’t buy him? Or have you been embarrassed while walking through a shopping mall, where you child will incessantly keep tugging at your sleeve asking why she can’t have the Hawaiian Barbie set this month? We’re guessing often enough! But that’s just your side of the story! Now imagine what your child must feel, when one week mom and dad are willing to buy just about anything they lay their fingers on, but the following week, even entering the same shop is taboo! It can be extremely confusing for a child to understand why parents are so fickle.

This is exactly why broaching the subject of “the value of money” with your child is extremely important! After all, you don’t want to seem restrictive without good reason! Experts advise that talking to children about the value of money should start early. Teaching children about the value of money is really about building their fiscal awareness, an understanding of where money comes from and how to use it responsibly. Here are some handy tips to get you started on the subject:

Laying out the basics: Children start to notice money fairly on, and in their world it is only natural to believe that money comes from either your pockets or the machine (Read ATM) on the corner and is readily available when it’s needed. Explaining to your child that money is earned by working, and that you can only spend what you earn, is a good place to start.

An allowance will help bring the concept to light: To help them understand what it’s like to get paid on a schedule, you could begin by paying an allowance for chores around the house such as washing the car, or bringing the morning paper in or just for helping to water the plants. It’s important however in this case to stick to a payment schedule, just like it is in a real job; else the lesson may be lost.

Make Savings fun: Making a piggy bank from an empty jar or shopping for it together would be a fun way to start the savings ritual for your child. This could present an opportunity to teach about both savings and about interest. Encourage your child to save a portion of his/her allowance for a special goal which could be to buy a video game, or a watch or the new racing cycle. As they save money, you might reward them with a small additional amount, just like a bank pays interest. You could also look to plotting the savings on a chart for a fun visual reminder of how close the goal is!

Opening a bank account: While a piggy bank can serve as a good introduction, opening a bank account would be the next logical step to translating the above learning into real action.  

Teaching your children about the value of money will pay rich dividends as it helps to put your child on the right track by encouraging smart money habits now. While you can broach the subject with your child in your own personal way, we are sure these tips may help you avoid another meltdown the next time you visit a shopping mall. We would love to know how you tackle this subject with your children.