I have been, or can be if you click on a link and make a purchase, compensated via a cash payment, gift, or something else of value for writing this post. Regardless, I only recommend products or services I use personally and believe will be good for my readers.
There are many things that we, as parents, teach our children. It starts from the day they are born and continues even into adulthood sometimes. One of the things parents need to consider is how to teach kids to manage money.
This post is sponsored by BusyKid. All opinions are my own.
Why Teach Kids to Manage Money?
Teaching our children basic life skills is something that should be happening at home. But, it isn’t always happening.
For years, some of the information was presented through classes in high school. I remember taking one for a semester which included many basic skills. We learned to prepare simple meals. Basic sewing skills (e.g. sewing on a button) were taught. And, there was the short section on personal finance which included how to balance your checkbook.
Right now in the US, only 7 states require high school students to pass a basic finance test in order to graduate. Depending on where you live, it is possible that your child would never spend one hour talking about this important topic before being on their own.
Sadly, many young adults (or even not so young adults) have no idea how to manage money. They are often found living paycheck to paycheck. Or worse, they carry a debt load that should make them cringe. Yet, it seems to just be expected.
Even scarier is a recent study showed that the majority of parents received a grade of C or worse when it came to understanding basic finance. If we as parents can not manage our finances, how can we teach our kids?
I’ve heard some people blame it on a shift from cash or check to everything being digital. I won’t argue that there is a difference in handing over cash compared to swiping a card. Only a very disciplined individual can make sure that they only spend what they have in the bank rather than spending future earnings.
Ways to Teach Kids to Manage Money
The absolute best way to teach kids to manage money is having them observe everything you do. I have tried to take this approach with my boys in the past.
Be prepared that a younger child might not fully grasp the idea of money on hand versus money in the bank. It takes time, just like they needed to mature to realize fantasy is not reality.
Funny story related to this: My eldest constantly heard me saying no to his queries for things at the store. I was trying to operate on a cash envelope system at the time and showed him I only had so much money in my wallet and it needed to cover the groceries. A few days later I was told by a classmate’s mom that her daughter came home saying we only had $8 to our name and needed money. He didn’t realize that there was a small reserve in the bank. But, he did grasp that $8 wasn’t very much!
As children mature, many families will begin giving an allowance for chores. In our house, we decided that some things were chores expected to be done as part of the family. However, there are always odd jobs that will pay them a fee if completed. Any of their ‘wants’ then come from the money they have earned.
BusyKid Site for Managing Allowances
BusyKid is a website that helps parents in the United States introduce chores and allowance to their children.
Once an account is established, you can select chores to assign for each family member. Those chores come with a monetary value attached.
They earn a weekly allowance based on what they complete. This money is put into their BusyKid account just like a parent may have a paycheck put into a bank via direct deposit.
This money is put into their BusyKid account just like a parent may have a paycheck put into a bank via direct deposit. Parents have to give permission for the transfer from their bank account to the child’s account. So, it is easy to dock their pay if chores claimed to have been done were not.
As their money grows, the child can elect to donate to charity, spend or invest for the future. You can choose to have parental approval required for it all, or allow an older child to make the decisions on their own.
CEO Gregg Murset shares:
“Basic financial topics such as saving, investing, budgeting, credit, taxes, loans should be taught with the same importance as reading, writing, math and science in our schools. It’s not the fault of teachers, but we aren’t preparing our children properly to face a world of hard financial decisions.”
A Few Key Facts about BusyKid
– Price is now $14.95 for the entire family for one year.
– The BusyKid Spend Card, a reloadable Visa® prepaid card, allows kids to move their allowance in order to spend in stores or online. There is a $5 fee per year per card.
– For a limited time, 2 kids of each new family will receive a free $10 stock. They want kids to learn how to invest so they decided to give them their first experience in dealing with the stock market.
What are some ways that you teach kids to manage money?
Is BusyKid a platform that would be helpful for your family?