8 Essential Money Lessons You Need to Teach Your Kids

May
03

8 Essential Money Lessons You Need to Teach Your Kids

This post was created as part of a paid partnership with Trademore.

[embedyt] https://www.youtube.com/watch?v=nIuBC5CZadU[/embedyt]

Growing up, my parents didn’t talk to me about money. Or I guess that I should say that they didn’t teach me about specific money concepts. I learned about currency in math class. The difference between quarters, nickels and dimes. How to calculate how much change I would get if I bought three oranges for $0.35 each and paid with a five dollar bill.

I was pretty lucky that I always had an affinity for math and numbers. I loved numbers so much that I joined my school’s math team just for fun! Even still, I’ve definitely made financial choices where, had I known then what I know now, I would have chosen differently.

How to start having those important money conversations

It’s so important to talk to your kids about money early and often. Joseph and I are often asked how we do this with our own kids so we thought we’d start by sharing these eight essential money lessons as a way to kick of these conversations with your kids.

Now, when it comes to talking to Alexis about money, by far the purchase that has been at the heart of those conversations is: cellphones. Cellphones, especially the newest model phones that kids often want, can be quite expensive. And kids aren’t particularly gentle on their phones (Alexis has lost and/or drowned hers at least three times).

Applying the lessons to real life: the new cell phone conundrum

We use these cell phone conversations as an opportunity to teach Alexis about wants vs. needs and how to prioritize. We talked her through the decision-making process to help her recognize the value in purchasing a used but high quality later model phone from Trademore would save her a lot of money over buying new.

Plus she was able to trade in her old phone through Trademore’s easy trade-in process which saved her even more! All she had to do was head to Trademore’s website and find the value of her phone. She received an instant offer that was locked in for 30 days. A few days later, a pre-paid box came for her to send in her phone.

The eight essential money lessons you should teach your kids:

  • What money is. This might seem strangely basic, but our kids don’t come into the world recognizing that everything has a dollar amount attached to it. It’s up to us to help them understand that just about everything costs money.
  • How to get money. This is the perfect opportunity to start talking openly about your own money. Teach your kids how you make money and how they can start making money even at an early age.
  • How to save money. Setting aside a portion of the money that you earn for your future self (aka saving)  is a lifelong habit, it’s the most essential, and yet it’s also the one that people struggle with the most. Help your child develop a savings first approach to money.
  • How to prioritize. Your child will always have less money than there are things in the world to buy. Teach them how to balance wants vs. needs so they get the best bang for their buck.
  • How to set financial goals. We are all about the goals-based approach to personal finance. Focusing on goals helps kids focus on making good financial decisions that help them create the life they want.
  • How to budget. Budgeting is how we take care of our money and make sure it’s going where we want it to go.
  • How to have a positive mindset about money. Mindset is everything. A positive money mindset will help kids worth through financial challenges and feel confident in their ability to manage their money.
  • How our financial system works. Kids need to know the process of managing money including banking, investing, credit, entering into financial contracts, and the financial consequences of seemingly non-financial issues (like breaking someone else’s toy).

Watch the full video up above and click here to subscribe and watch on our channel!

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