Habits are a funny thing. They are created subconsciously but govern many of the conscious decisions you make in life. Habits developed in children are strongly influenced by the adults around them. Kids are constantly watching and learning. Whether you’re a parent, teacher or close relative, you can shape the mindset of children around you.

Kids hear with their eyes, learning more from experience than from lectures. Nowhere is this principle more true than when teaching them the importance of money. The subject can be rather dry if discussed theoretically, so find ways to make it exciting for them. Here are five non-preachy techniques you can use to teach your kids savvy money management.


1. Reward Them for Saving

Children realize, at a very young age, that money is necessary to buy the things they want. They see the attraction of spending but don’t understand the benefits of saving. So it’s up to you to show them how savings can make their money grow.

Luckily, certain banking platforms have turned financial literacy for kids into an enjoyable activity. Through games and rewards, kids get to experience saving, spending, and sharing in a fun but secure environment.

You can add to the fun by creating a savings matching program. Tell your child you’ll add more money to their account every time they reach a savings goal. This not only encourages them to save, but also demonstrates the importance of financial goal setting. Alternatively, you can make the end goal a PlayStation or a trip to an amusement park. That will add to the incentive and make them realize that saving takes time, but it’s worth it in the end.

2. Help Them Earn Money

Kids who get a weekly allowance or gifts from Grandma may underestimate the effort it takes to earn money. You can give them a taste of working for a living by assigning age-appropriate chores to be completed before they get their allowance. This instills a sense of responsibility and makes them value the fruits of their labor.

Encourage your child to take up a part-time job babysitting or mowing the neighbor’s lawn. Let them negotiate their own salary and schedule. Doing so can improve their communication skills and confidence.

Keep in mind that kids are prone to losing interest quickly, which is where you come in. Impress upon them that sticking to commitments is essential if they want to build strong relationships in whichever path they choose.


3. Let Them Run Their Own Business

Kids are usually on the buying end of most transactions. Giving them the experience of selling lets them see both sides of the equation. Selling Girls Scouts cookies is a great way to start teaching basic math and selling skills. Similarly, a lemonade stand can impart valuable lessons about planning and budgeting. Not only do these business ventures teach kids how to handle real money, but they also fine-tune their customer service skills.

Failure is often a better teacher than success. If their business doesn’t do well, help your child understand what went wrong and get back on their feet. Teach them how to take calculated risks and think like an entrepreneur. Tell them the stories of J.K. Rowling and Walt Disney, whose ideas failed before they became mega-successes. These stories help children see the lessons in human terms, so they can relate to them more.

4. Use Games to Teach Money Management

Don’t underestimate the teaching power of classic board games like Monopoly, Pay Day, and Life. Use the opportunity to introduce financial concepts like saving, building, and investing while you play. When they’re on their own, your child can play similar money management games online. Experimenting with play money today may help them be more careful with real money tomorrow.

In today’s digital age, kids see credit cards more than dollar bills. To introduce the concepts of credit, role-play being the banker and lending your child some money. Teach them that the longer they take to return the money, the more they’ll have to pay back. Explain financial strategies, but let them make their own decisions. Sometimes kids need to face the consequences of poor financial choices before they mend their ways.


5. Teach Them How to Prioritize

Financial management is all about making the right decisions with your money. Include your child in your day-to-day transactions to get them into the habit of thinking about financial choices. Tell them when it’s a good idea to buy items on sale and when a bargain is likely to be a scam. Ask them their opinion while you shop, and listen to their recommendations attentively. They’ll learn how to value their money when they see you value yours.

Kids who crave immediate gratification may have trouble saving as adults, so start teaching your child to prioritize early on. One way to do so is giving them three jars: one for spending, one for saving, and one for giving. Whenever they get money, encourage them to put a little in each jar. This instills the value of budgeting, saving, and philanthropy simultaneously. As the jars fill up, the visuals will be easier to understand than abstract bank accounts.

Teaching kids to manage money wisely doesn’t have to be a dull or daunting task. Be creative and customize games and activities according to your child’s interests. The lessons they learn today can pave their way to financial success and independence in the future. So get started on the journey to financial literacy, and watch your child grow into a sensible spender and responsible saver.