Can you remember how you first learned about money?

For many of us, thinking about our earliest money memories may bring to mind lemonade stands, car washes or door-to-door fundraisers. Even more so, we probably have some sense of how our parents felt about money, and we may recall how they spoke about it in our presence. We probably have memories of our first allowances, bank accounts or exciting money gifts from relatives.

All of these first experiences with finance are important building blocks for our children, and they lay a foundation for how our kids will approach the topics of money, spending and saving as adults. Martha Kamp, community relations manager at CEFCU, provided some guidance about best practices for teaching money management and personal finance to kids.

How should parents talk to their children about money?

Most children go through phases of wanting everything when they go to the store with their caregivers. Use these opportunities to talk to your children. Cite big events such as birthdays and holidays as times that we get things, rather than purchasing something every time they go to the store. Ask your children to use some of their own saved money, or to save money toward a toy or a book they are interested in. This will help them determine if the item is something that they really want, or if it's just something that looks shiny now.

How should we introduce our kids to money concepts?

For kids in the lower elementary grades, maybe second or third grade, it is important to teach the very basics. For this age group, that may mean differentiating between needs and wants - meaning, what are the things that you need to survive (water, food, shelter) versus what are things that you simply would like to have, such as a bike, a book or a toy. We also should talk to our kids about how to save, whether in a piggy bank at home or in an account at a financial institution. The concepts of dividends and interest are very exciting for kids at this age, and can be a good entry point into putting your money in an account.

Playing with pretend cash registers, money and ATM machines are all good introductions for much younger kids, such as preschool-aged children.

Many of us use debit and credit cards while shopping, rather than physical money. This can be a little hard for children to comprehend. How can we explain the abstract aspects of money to our children?

It is important to make spending more concrete for children. For most children, seeing things on paper and writing them down helps. For example, when a child is old enough, let them sit down and balance your checkbook register while you are paying bills. Before you head to the grocery store with your child, write down a budget. Let them help you stick to a food budget. This is a good way of allowing them to see that maybe the budget doesn’t allow for a “want” like soda this week, but it could be in the budget next week.

Additionally, visiting a bank or credit union is a great way for kids to see and understand where their money is being kept.

How can parents instill ideals such as saving and charitable giving?

Parents always have the opportunity to lead by example. Kids learn by seeing, rather than by us telling them things. Rather than automatically putting money into your savings account, one idea would be to take your child with you into the bank or the credit union. The same goes for charitable giving. Let your children see you giving money to a church or to a cause. Even better, allow them to make the donation. Doing these things routinely will help instill the importance of these values in your children.

Pamela Savage is a freelance writer in Springfield. She has an elementary-aged child who likes to save and learn about money and a sweet preschooler who likes to ask for things at the store.

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