Money lessons for kids

To help kids aged 9-12 manage money responsibly, BMO Harris Bank suggests the following:

Give an allowance

Your child is ready for an allowance when he or she begins recognizing money’s value. Try giving the same amount each week so your child can get used to budgeting the amount for expenses such as snacks, movie tickets and toys, as well as a small portion to deposit into savings. The allowance should be based on your own finances and how much you think your child needs to spend each week.

Allowances help kids get familiar with budgeting so as they start making money in their teen and adult years, they know how to spend and save it wisely.

Teach the difference between needs and wants

Kids sometimes have trouble grasping the difference between things they need and things they want. Help them learn this lesson by using scenarios that are relevant to them. For example, they need to have money to purchase food for lunch.

However, a new toy is a want because it’s not something that’s necessary for living. Your best strategy is to help your kids understand they need to budget enough money to take care of their needs and the remaining amount can be spent on wants.

Encourage charitable giving

One of the easiest ways to teach your kids the importance of charitable giving is to include them in volunteer activities you participate in. For example, if you help at a soup kitchen once a week, have your child come along to serve beside you.

Once they form a connection with an organization, they’ll be more likely to want to help support it with a monetary donation. Instead of just telling your kids where to put their money, find an organization or cause they feel passionate about and want to get involved with directly.

Also read:

Kids more financially savvy than we think

Raising financially fit kids

Kids’ financial literacy? There’s an app for that