Did you know that only 17% of high school students are required to take a personal finance course? Unfortunately, most of us didn’t learn much about personal finance or investing at home or in school when we were growing up either.
The Gift of Financial Education: Money Skills and Financial Freedom
Teaching grandkids about money is crucial because money is an integral part of our daily lives. Planting seeds now is important, even while they are still riding scooters, swinging on monkey bars, or coloring with crayons.
It’s important to introduce them to the concepts of earning, saving, spending, and managing money wisely so they understand the value of a dollar. This helps shape good money habits and smart financial decisions as they grow.
Instilling positive habits teaches financial responsibility, builds confidence, and leads to better decisions, helping to prevent common financial mistakes later on, such as credit card debt, living without a budget, and struggling to manage money.
Why Parents and Grandparents Should Teach Kids About Money
Too often, parents avoid teaching their kids about money because they think their children are too young to understand, or they assume their kids will learn how to manage money when they’re older.
This is a big mistake. When left to learn about money on their own, kids may pick up both good and bad habits from friends, social media, or through trial and error. They also observe how their parents handle money, sometimes unknowingly adopting poor money habits that can lead to financial stress, paycheck-to-paycheck living, or debt.
It’s critical to break this cycle by teaching kids’ good money habits at a young age. This is where you, as a grandparent, can be of service. You’ve been through a lot in your lifetime, and you know the good, the bad, and the ugly of managing or mismanaging money.
Teaching Kids About Money Is Simple
It’s not hard to teach kids about money. Keep it simple, practical, interactive, and fun!
Teach them the basics in an age-appropriate manner. Real-life examples and hands-on activities are some of the most effective tools. The key is to start early, be consistent, and make it fun!
Age-Appropriate Money Lessons
Ages 3 to 7
Piggy Bank and Play Money
Young kids can start identifying coins and understanding that money has value. Introduce the concept of saving with a piggy bank. Encourage them to save spare change and let them see how money adds up over time.
Play Store
Let kids practice making choices, purchases, and counting in a pretend store setting.
Ages 8 to 12
Earning an Allowance
Let kids earn a regular allowance by doing chores. This teaches them about earning, budgeting, saving, and responsible spending. It helps them set savings goals for something they might want or need.
Grocery Shopping Game
Give them a budget and let them make choices within it. This helps them learn to make good decisions – and likely a few bad ones, too!
Ages 13 to 18
Savings Accounts and Compound Interest
Introduce them to savings accounts and explain how compound interest works. If you give them a debit card for purchases, link it to their savings account to teach responsibility with card usage.
Family Financial Discussions
Include them in discussions about household bills like the mortgage, rent, electricity, water, and groceries. This teaches them the real costs of day-to-day living.
Ages 18 and Beyond
Credit and Loans
Explain how credit and loans work (e.g., student loans, car loans, and mortgages). Teach them the importance of maintaining a good credit score and about compounding interest when saving and investing.
Fun Family Activities to Teach Kids About Money
Entrepreneurship
Encourage a lemonade stand or selling artwork/crafts to teach about earning, expenses, and profits.
Board Games
Games like Monopoly teach concepts of buying, selling, and investing in real estate.
Grocery Shopping
Teach decision-making, price comparison, staying within a budget, and the value of coupons.
How to Raise a Grateful, Respectful, Responsible, and Non-Entitled Child
This is one of the biggest challenges parents and grandparents face today. While a certain degree of “good spoiling” is okay, especially for grandparents, too much of anything – whether toys, clothes, gadgets, or electronics – can overwhelm and have negative consequences.
For example, too many choices can lead to overstimulation, fatigue, lack of focus, and diminished creativity. Toys are meant to enrich and teach children, but an overabundance can have the opposite effect. Kids thrive with fewer toys and benefit from simplicity – less is more.
Finding Balance
While it’s important to provide kids with what they need and enjoy, don’t give them so much that they don’t appreciate it or feel entitled. Striking this balance is essential if you want your kids to be grateful, not entitled.
Set Limits and Stick to Them
Say no to your kids often – and mean it. Teach them about delayed gratification. Have them do chores to earn money. Teach them to respect and care for their belongings.
Buy Fewer Things
Instead of buying more, spend more time with your kids. Create and enjoy experiences with them that will last a lifetime.
Teaching kids about money from an early age sets the foundation for lifelong financial success. By instilling good habits, fostering responsibility, and making learning about money fun, you equip your children with the skills they need to make smart financial choices as they grow.
Let’s Have a Conversation:
What strategies have you found helpful in teaching your kids and grandkids about money? Share your experiences in the comments below!
