Ways to Teach Kids About Growing Money

The more a child is exposed to financial concepts at a young age, the more potential they have to learn about growing money. Financial education is more than just about depositing and withdrawing money from a bank, it is also about investing, balancing budgets, buying and selling, and planning financial goals. These concepts can be integrated through games involving money, allowances, real life trade and financial planning.

• Work ethic and financial responsibility

If a child is taught that good grades, working around the house and behaving well earns money, and they receive the majority of their money from such actions they are more likely to do things that will earn them money. Keep in mind kids are kids and may simply choose not to do a task unless they are encouraged or reminded repeatedly, but if they want something bad enough they are morel likely to work for it.

• Budgeting

Budgeting can be taught through allowing kids to manage their own expenditures via a parent sponsored kid fund. Continuing with the step above a child can be taught through repetition and consistency that when they do good things the value of their "kid fund" or whatever name it is given goes up. When they want something, they can learn about true cost in the real world and how that will affect the balance on their fund. This is not to say kids should not get gifts every now and then, but it is to say if they want more than birthday presents, Christmas gifts and the occasional good will, they'll have to budget for it.

• Trade and barter

When kids don't want old toys, eBay can be a great way to teach them about buying and selling. By auctioning the old toys on eBay, they can learn how to sell and use the proceeds from the sales to either save, invest or make new expenditures on new toys and other items on eBay for a possibly lower cost than retail. This can also teach cost cutting and comparison shopping.

• Investing

Another important lesson kids can learn about growing money is investing. Concepts like interest, saving, and managing money for growth can be taught through financial video games and board games, child savings accounts, and actual investments such as bicycles, toys, comic books, collector stamps, coin collecting etc. Many of these things may appreciate in value over time or be valued by other collectors making them investments that may or may not appreciate in value. This helps instill the lesson of investing wisely and/or investing for gain.

Kids can be taught about growing money just like they can be taught how to read, play a musical instrument, add and subtract etc. It really isn't that different and the younger they are when they learn such things the better. What's more, by using the methods in this article consistently a child is bound to learn at least one or two things about growing money that he or she might not have learned by not participating in the activities, some of which are actually fun.