9 fun ways to teach your child about the value of money!

Money management is an important skillset for every child to develop. There are lots of ways parents can incorporate lessons into daily life, and the best time to start is now. Here are a few fun ways on how teach your children the value of money.

1. Explain where money comes from.

“When you’re teaching your kids about money, it’s important to teach them where it comes from. Money does not just come from mom’s or dad’s wallet,” says Rachel Cruze, personal finance expert and the co-author of “Smart Money Smart Kids: Raising the Next Generation to Win with Money.” “When you work, you get paid. When you don’t, you don’t get paid.”

2. Preach the three principles: giving, saving, and spending.

“Once you’ve established that money comes from work, I recommend teaching your kids three basic principles when it comes to money — giving, saving, and spending,” says Cruze.

“Giving is one of the most important of the three categories because you’re teaching them to feel the impact of helping others at a young age. That’s invaluable,” Cruze continues. “As for saving and spending, encourage your child to set aside some of their money to savings and some to spending each time they get any. Remind them that once their money is gone, it’s gone. And yes, your kids will make mistakes, but it’s better that they make those mistakes under the safety of your roof.”

3. Have your child physically organize cash with three piggy banks.

Young children especially need tangible ways to understand abstract concepts, so it’s important to not just explain these three money principles but give them concrete tools to practice them.

“Instead of just having one piggy bank for your child, get three, and label one ‘spend,’ one ‘save,’ and one ‘give’,” says Logan Allec, founder of the personal finance site Money Done Right. “This works best with kids 6 years of age and older. “Any time your child gets money — allowance, payment for completing a task, birthday money, etc., — encourage them to split the money up between all three banks. The key to this being educational is to allow your child to choose how they split the money, as well as what they do with it.”

This exercise is not only helpful in getting kids confident in money matters, but it also provides an opportunity for parents to have meaningful conversations with their kids about money management.

4. Bring the kids in on family budget talks.

“I have found that the best way to teach your kids about money is to bring them in on family budget discussions,” says Leif Kristjansen, the founder of FiveYearFIREescape, where he blogs about his early retirement. “They will see how you responsibly handle all of life’s pile of bills and issues. Kids naturally want to emulate their parents so they will start to think about spending and how to minimize it.”

These money talks should be casual and can even take place at the dinner table. If your kids are too young to really participate, that’s fine. The goal here is to simply get comfortable talking about money as a family without stigma or stress.

5. Paying bills online? Let kids in on the process.

Budgeting and taking care of bills can be a headache. Why not bring your toddler in to lighten the mood? You may be rolling your eyes, but it’s doable, says Kristjansen.

“I let my daughter [who is not yet school-aged] sit on my lap while I pay the bills or check on my investments to see how it works,” says Kristjansen. “I don’t let her hit many buttons in case she does something bad, but she still likes it.

6. Give cash for birthdays so they can see making budget-based decisions.

Come birthdays and other holidays where giving gifts is the norm, consider giving kids money instead. This not only saves time on shopping, but it also empowers kids to do the math and be shrewd.

“We stopped buying gifts for the older kids and started giving them money so that they can make budget-based decisions,” says Thomas. “In the past, when they made birthday and Christmas lists, they put so much on the list — we thought they should start understanding how much things cost.”

7. Allowance is fine, but make it count.

Kids, like all humans in civilization, will come to a point when they need money. This could be for sports activities, a field trip or buying their friend a gift. Giving them an allowance is totally fine but enable them to earn it. This again strengthens the understanding of how income works.

You may pay your child for doing chores outside his or her normal daily tasks (for instance, she does not get paid for cleaning her room or helping care for her younger brother, which are non-negotiable).

“You don’t want your child to associate chores exclusively with earning money,” says Nicola. “Because if she ever gets a job, she’s going to stop doing chores in the house. And that’s a problem, she has to contribute to the household like everybody else.”

8. Did your kid blow all their money and needs more? Seize this teachable moment.

Many parents can relate to this scenario: your kid had money, but they spent it all at the toy store. Now, you’re at the toy store again and they want something, but they don’t have the money. What do you do?

Don’t cave. Instead, seize this “teachable moment,” as Cruze calls it. “Teach them that when money runs out, it runs out,” Cruze says. “It will be tough in the moment, but in the long run you are teaching them to live below their means — and that’s the only way to win with money.”

9. Work on your own relationship with money.

Young children are constantly observing — and absorbing — our behavior. If you’re spending above your means, or stressing about money, your kids are likely picking up on this and learning that this is what money is: a thing of scarcity or scares, or whatever you project onto it.

“I always say that ‘more is caught than taught.’ Your kids will see how you handle your money, and their actions will mirror that,” says Cruze. You have the opportunity as their parent to lead by example and set them up to win with their money.”

Many banks, including Fidelity, offer special savings programs just for children. Fidelity’s Green Team Savings plan is designed to make learning about saving fun. For a minimum deposit of $1, any child under age 18 can open an account. Green Team Savings offers exclusive events with the program’s mascot, Sammy Saves-A-Lot, special products, and discounts.

Fidelity Bank has built a strong history as trusted advisors to clients served and is proud to be an active member of the community. With branches located throughout Northeastern Pennsylvania and the Lehigh Valley, Fidelity Bank offers full-service Trust & Investment Departments, a mortgage center, and an array of personal and business banking products and services. The Bank provides 24 hour, 7 day a week service to clients through a variety of digital banking tools, branch offices, online at www.bankatfidelity.com, and through the Client Care Center at 1-800-388-4380.