July 25, 2012

9 Fun Ways to Teach Your Kids about Money This Summer

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Teaching kids about money is, perhaps, one of the more difficult aspects of parenting, and it’s one that some neglect. We’re seeing a huge and growing age gap between the young and old as far as money management goes, and this could be because today’s twenty-somethings weren’t taught very well about money management.

Clearly, we’re missing something between the generations, which means that it’s more important now than ever that parents teach their kids about money management. Here are just nine fun ways you can do that this summer:

  1. Start a business

    Today’s kids are more likely than ever before to become freelancers or entrepreneurs during their careers, as the traditional job market is shrinking. Get your kids started early by encouraging entrepreneurship this summer. The old-fashioned lemonade stand is a great place to start, but you could also encourage kids who are great at making things to sell their wares at a local farmer’s market or even encourage older kids to start a mowing business.

  2. Commission for chores

    Instead of giving your kids a set allowance, no matter what they do, consider switching for the summer to a commission-based payment plan. Set a price for different chores – including plenty of outdoor chores that will get your kids out of the house on long summer days – and then pay your child only for the chores he or she does. Kids will quickly learn that hard work helps them earn more money.

  3. Vacation money

    If you’re going on a family vacation this summer, it’s a great time to teach kids about the value of a dollar. Give each child a set amount of cash at the beginning of the trip, and tell them that the money will have to cover all their meals and souvenirs for the trip. If they run out of money, you’ll provide a peanut butter sandwich for meals, but they won’t get to buy more souvenirs or eat out at restaurants with the rest of the family. This can be an interesting, challenging way for kids to learn an incredibly valuable lesson about budgeting and delayed gratification.

  4. Start a journal

    Teaching kids to write down their income and expenses is a great way to start getting them to think about budgeting. Summer is an ideal time to start such a journal, since kids won’t be worrying about school work. Pick out a notebook together for money management, and then teach your child to write down income and expenses to keep track of how much money he or she has at any given time.

  5. Set goals together

    Help your child succeed at something great this summer by setting savings goals together. Kids are better at saving for shorter-term goals (college may be a little too far away for their imagination). For instance, if your child wants a new bike or electronic toy, challenge him or her to save up for half of it by the end of the summer. Then, during the back to school shopping sales, you can kick in the other half to reward your child for all the hard work.

  6. Invest

    It’s never too early to start investing, and kids can have fun investing if you let them buy stocks of familiar companies, like Coca-Cola and Disney. Open a college account, and help your child decide where to buy a few shares. Then, learn how to track the performance of your child’s stock together, which is an interesting way to get your child interested in the economy and the basic principles of investing.

  7. Meal planning

    Older kids can really get a kick out of planning meals for the entire family, particularly if they already like to cook. This summer, start a new meal planning family tradition for your older kids. Give your child a budget for a family dinner - a reasonable amount of money but a small enough amount that they’ll have to plan carefully or risk running out of cash. Then, plan a meal, make a list, go grocery shopping, and make the meal together. Kids can really get a kick out of the challenge of coming up with tasty, affordable meals for the family.

  8. Give back

    A part of financial education for your kids should definitely be about how they can be generous with their time and money, which breeds good character. Teach this generosity by helping your child find a way to give back with his or her time and money this summer. This could be buying a few treats for the local dog shelter and taking them to the dogs personally, or it could mean buying fabric to make baby blankets for a local women’s shelter.

  9. Play games

    Kids love to play online games, particularly when the days are just too hot to play outside. Make these play times financially educational by sending your kids to the Financial Education Clearinghouse, through the Washington State Department of Financial Institutions. The Clearinghouse offers plenty of interesting, fun games for kids where they can learn more about money management.

These nine steps can help you have fun with your kids this summer, all while teaching them more about money management. It’s more important than ever, in today’s shaky economy and changing employment environment, for kids to learn how money works and how to properly invest their money so that they’ll be more prepared for the future.

This summer, help your kids learn important life lessons with activities like these.

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Follow @CreditDonkey or write to Abigail H at abigail@creditdonkey.com

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