By Daniel Bortz | U.S.News & World Report LP
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 kids of all ages.
Teaching your kids about money should start as early as possible. "As soon as your child starts asking for things, I think it's time for them to understand that things cost money," says Anton Simunovic, founder of ThreeJars.com, a website dedicated to teaching kids about money management.
But what lessons should you start with? Neale Godfrey, author of Money Still Doesn't Grow on Trees: A Parent's Guide to Raising Financially Responsible Children, suggests beginning with the concept that money must be earned. "There's no entitlement program in life," she says. "Kids need to know that they can't just whine for a toy in a store and automatically get it."
As kids begin to learn about money, parents shouldn't feel intimidated. "The topic of money shouldn't be something that's taboo," says Jayne Pearl, author of Kids and Money Guide to Learning Capital. If you're uncomfortable talking about it, she says, it won't be an enjoyable experience for the kids.
You should also be careful not to argue about money in front of your kids. "If the parents are constantly arguing about money, their children are going to view money as a source of stress," says Jon Gallo, who coauthored the book The Financially Intelligent Parent with his wife, Eileen.
Starting to feel a little less anxious? Here are six more ideas for making money fun for kids:
Use cash. Showing kids purchases with a credit card won't do much good, the Gallos say. "Don't [buy items] on credit cards or with checks, because that's completely abstract," says Eileen Gallo. "Let your kids hold the money and see the money leaving their hands." A fun way to accomplish this with young children is to deposit coins in a parking meter.
Utilize a piggy bank for the 21st century.A traditional one-slit piggy bank doesn't teach kids much about money management, says Susan Beacham, CEO and cofounder of Money Savvy Generation in Lake Bluff, Ill., a company that helps parents and educators teach children to make good money choices.
Beacham says games are an excellent tool for approaching the topic of money with kids. "Games become something you can use to open the discussion, so it's not always you preaching about money," she says. Grade-school children can play Planet Orange at OrangeKids.com. In the game, kids travel through the planets by completing certain jobs to earn money for gas.