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Handling your own finances can be tough. Teaching those same important lessons to your offspring? Now that’s a whole other animal all together. Don’t sweat it. It takes years and years to understand how money works, so don’t expect your kids to know everything from birth. That being said, it’s uber important to teach kids about money early on. You’d be surprised how many people go off to college without being able to make sound financial choices, because they’ve never had to do it before. Start teaching them the ins and outs of money while they’re young, and they’ll be much better prepared to handle it themselves out in the real world.

Now, there are endless methods and tips on how to show your kids the importance of money management.  Google it, and you’d stay busy for days! We’ll save you some time, and just share our personal story of teaching our kids about the world of finances.

Started early.

As soon as our kids were old enough to hold money without trying to swallow it, we started the conversation. What is money? Why is it needed? What is it used for? We explained that everything we have in our daily lives is paid for with money – our house, the car, their toys, clothes, food, the lights, the water…the list goes on and on. We also explained that the way we make money is by working. You’d be surprised, but if you don’t explain to kids where money comes from, and how you earn it, they just think it appears every time you go to the ATM, swipe a credit card, or shop on Amazon. It’s like magic! Ah, wouldn’t that be lovely?

Gave them some dough.

Yep, when our kids were about six, we made a Target run, bought some wallets, and put a little coin in them. They started getting an allowance that they’d earn by completing a list of chores each week. A good life lesson came from starting this routine: work = money, no work = no money. And if they wanted to do a little more to earn an extra buck or two, more power to them!

The best part of our kids having their own money was that they started to learn how much things cost. It was on them to buy the extra stuff they wanted. Treats every now and then were happily on us, but if they HAD to have that pack of gum or Lego set, they had to fork out their own dollars. It’s amazing how kids really, really, really need something, until they have to use their own money to buy it. Then, suddenly, it’s not nearly as much of a necessity. Nobody likes living with an empty wallet, and as it turns out, children are no different.

They have an app for that.

There are many tools out there to track children’s chores, savings, allowances, etc.  We researched various apps to find one that would help us follow our kids’ savings, and settled on Bankaroo. It’s an app where you can “deposit” funds into an imaginary account, and it tracks the money as you go. We mirror these “savings” with real deposits into our kids’ savings accounts at the bank.

To get the ball rolling, we came up with some ground rules. Here’s the biggest one: Once money goes into savings, it doesn’t come back out for random purchases. Our goal? To teach the kiddos how to save for the long haul. We do have a list of acceptable reasons for withdrawals: starting a business, giving to charity, and buying a car. Otherwise, the money stays put until they’re adults.

Bankaroo deposits happen once a month. The kids must deposit a little something every single month, and we match to a certain point, much like a 401k. We started with a 100% match into their savings accounts, and gave the kids back half of what they deposited for spending money. It goes like this: if our daughter deposited $10, we’d match her $10 ($20 total into savings), and give her back $5. The match provides them an instant return on their investment, and the cash back was our reward to the kids for saving some beans. Win. Win.


So far so good! Our kids are learning how much things cost, how to handle their own money, and how to save for the long term.  There are certainly any number of ways to accomplish the same thing with your children. Be flexible and don’t be afraid to adjust your savings program to emphasize what matters most for you.  The key is to start educating them early!

If you could use advice on how to get started, or want to share your own financial parenting story, leave a comment below, or drop us a line. We’d love to hear about it!

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