Money Talks: How To Teach Kids About Finance

Savings Basics

Teaching children the fundamentals of savings is crucial for their financial literacy. Jen Hemphill suggests starting early by encouraging kids to save a portion of any money they receive, such as gifts, to make saving a natural habit 1. She recommends using piggy banks with separate slots for saving, spending, and giving, which can help children understand money management from a young age 2.

If we get into the habit of saving, that's gonna be second nature to them getting into the habit now it's going to be a no brainer.

--- Jen Hemphill

Opening a bank account when children show interest can also be a valuable learning experience, offering a tangible way to grasp financial concepts 2.

   

Spending Choices

Helping children make informed spending decisions is another key aspect of financial education. Jen Hemphill shares her approach of allowing her son to make purchases with his own money, which sometimes leads to regret but serves as a learning opportunity 3. This method encourages discussions about delayed gratification and the importance of thoughtful spending.

Do you really want it, or should you think about it because you don't want to regret your purchasing decision?

--- Jen Hemphill

She also emphasizes the importance of having open conversations about money, helping children understand the value of earning and spending wisely 4.

   

Allowance Debate

The topic of allowance and chores often sparks debate among parents. Jen Hemphill believes that the decision to give an allowance should align with family values and the child's age 1. Allowances can teach children to manage money, make mistakes, and learn from them while still under parental guidance.

I think that is the power of allowance for them to manage that money.

--- Jen Hemphill

She acknowledges mixed feelings about tying allowances to chores, suggesting that families should trust their instincts and understand their children's needs 4.