The basic ideas about money are simple enough that quite young children can grasp them. For example, Robert Kiyosaki's best-selling Cashflow 101 game comes in a simplified version, Cashflow For Kids. Classic games such as Stock Market and Monopoly provide great learning opportunities, too.
We have played Robert Kiyosaki's board game Cashflow with our kids since they were very small, at first in a simplified form, but from about nine or ten they were playing the full version. We have also played games like Monopoly and Stock Market, and taken the time during the games to explain the real-life money lessons explored in the games.
A while ago one of the girls, aged about ten, during a game of Cashflow, looked up from the board and said "This is real life, isn't it? This is what you are doing in real life. You have the apartment that you rent out and the businesses ... and you won't let us buy doodads with your money! We have to buy them with our own money!"
The trick is to find the money ideas expressed in a way that is engaging for kids. There are some great story books which include important money concepts. George Clason's The Richest Man in Babylon is a classic, and our girls read Robert Kiyosaki's Rich Dad, Poor Dad for themselves from the age of ten or so.
Whether or not your kids are earning money outside the home, you can use your child's allowance to start teaching them about saving and investing. Teach them to set aside some money, for saving and for giving to charity, each time money comes in. You can use a visible method, like keeping cash in three separate jars, or you can keep the pocket money as entries in a book, and record deposits and withdrawals. The records, can be a useful teaching tool, especially if you note what the money was being spent on.
Our daughters have been in business since they were between nine and twelve, and all of them are currently working on internet businesses. They soak up information rapidly, and are very good at spotting adults making money mistakes.
Keeping language positive is very important. I had to train myself out of saying "We can't afford that," or "we don't have the money for that", and instead replace those statements with ones like "we choose to spend our money on other things", or "I don't want to buy that for you". I usually followed up with "you can have the thing, you just need to buy it with your own money".
If they didn't have enough money, I would say "well, you'll need to earn some more, then," and follow up with suggestions for things they could do to earn money - Grandma's ironing, or extra chores at home, or washing the neighbor's dog.
Kids may need lots of help at first to think of creative ways to provide value for other people (and be paid in return). Even a small amount of cash flow is very motivating for kids, though, so once they have a little experience they quickly develop ideas of their own!
Savings and Investment Information for Teens: Tips for a Successful Financial Life; Including Faxts About Economic Principles, Wealth Development, Bank ... Mutual Funds, and O (Teen Finance Series)
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