Instilling good money habits in your children is arguably one of life’s most important lessons. Fortunately, with today’s technology, there are many ways to make learning about money fun for children of all ages. With the right approach, your child will learn valuable financial habits.

Use Cash
Showing children purchases with a credit/debit card won’t do much good. As much as possible don’t buy items using credit cards, debit cards or checks, because that’s completely abstract. When you want to make purchases let your children hold the money and see the money leaving their hands; that’s easier for them to understand. Sometimes last month I was to go to the bank with my children to deposit the money that had accumulated in their piggy bank but due to time constraint we could not make it so I opted to do a transfer from my account while I kept the cash. This was not well understood by my 6 year old. He only decided to stop asking after I had explained so many times.

Give them a modern piggy bank
A traditional one-slit piggy bank doesn’t teach kids much about money management. Susan Beacham developed the Money Savvy Pig, a see-through piggy bank with four slots: save, spend, donate, and invest. With the Money Savvy Pig, kids learn that money isn’t just for buying things. You can develop one for your child too or make them build one. Another excellent way of making it work is using the envelope system where you use different envelopes for the different categories you want them to use their money for.

Take advantage of the Web
The Internet is full of age-specific money games for kids. Just last year, PNC Bank and Sesame Street teamed up to create fun videos and games that teach kids about money. The cashflow game by Robert Kiyosaki is another one of such. Many children will find it easy and exciting to learn about money from such sources. You can check online for some of such websites.

Let them play games
Games make the topic of money fun for kids. Games become something you can use to open the discussion, so it’s not always you preaching about money. Grade-school children can play Planet Orange at OrangeKids.com, where they travel through the solar system by completing certain jobs to earn money for gas. Cashflow for KIds and Monopoly are also very good games that teach excellent lessons on money.

Show them how to manage their own money
Let your child play an active role in how money is used by offering them an allowance. Consistency is important to achieve this. Many parents promise an allowance to their kids but don’t deliver. If parents forget to pay the allowance, children learn that money promises can be broken.

Encourage them to give back
In addition to having your child donate money (to a charity of their choice), make philanthropy more enjoyable by getting the whole family involved. Volunteer together at the local soup kitchen or participate in a fundraiser at the neighborhood park.

Adapted from: http://money.usnews.com/money/personal-finance/slideshows/6-fun-ways-to-teach-kids-about-money/1

– Gbonjubola Sanni