Watch kids talk about money
There’s nothing like a good joke to break the ice, especially when we’re talking about an intimidating topic like money.
So, when Saturday Night Live’s Kate McKinnon said she’d collaborate with me on a video to teach kids financial basics—a subject that makes most adults break into a cold sweat—I knew it’d be hilarious and helpful.
Whether she’s making the kids giggle about loans or crack up about credit cards, Kate delivers smart advice with more than a spoonful of comic genius. And just in time for April’s Financial Literacy Month. (You know you marked your calendar!)
Watch and learn about the bizarre places kids keep money—and the strange ways they expect to earn a living when they grow up. (What’s a “gagitator”?)
Beyond the belly laughs lies an important message: With kids’ money habits set by age 7, teaching our children the financial facts of life early is no joke.
Here are six simple ways to help your kids be smart about money in everyday moments:
Lesson #1: You need money to buy things.
How to teach it: Take a trip to a store with your little one this month, rather than buying online. While you’re there, tell him or her what you’re doing. Kids as young as 3 can understand basic money concepts like exchange (you give the cashier money, you get the stuff you want) and value (a car costs more than a carton of milk).
Lesson #2: You get money by working.
How to teach it: Money can seem like magic to kids, especially when we use cards or apps. So it’s important to explain that it doesn’t appear out of thin air. You work hard to earn the money to pay for food, clothes, and everything else. Talk about the different jobs people have—teacher, doctor, firefighter. And if you can swing it, take your child to work this month. It will be fun for you—and an eye-opener for your kid.
Lesson #3: You need to wait and save up for something you want.
How to teach it: Show them how patience pays off. We wait for our turn on the swings. We wait for our birthday. Encourage your kid to forgo small purchases (candy, stickers) and instead put cash in a piggybank to save up for a bigger toy (a Lego set!) he or she really wants.
Lesson #4: Buy what you need before you buy what you want.
How to teach it: While you’re shopping, point out the differences between needs and wants: “We need milk and veggies; we want chocolate milk and potato chips.” Then it’s your kid’s turn. As you walk down the aisles, ask: “Want or need?” Needs go in the cart. All but one or two wants stay on the shelves.
Lesson #5: A bank is the safest place to keep your money.
How to teach it: By age 5, your kid is ready to open a bank savings account. Look for an actual brick-and-mortar bank, so he or she can get the full experience. And before you pay a visit, make sure you find a no-fee account. (A number of banks have these for young savers—or will offer them if you bank with them, too.)
Lesson #6: You should only buy what you can afford.
How to teach it: Use cash in front of your kids—and show them that you need to make choices in a store. If you give your kid an allowance, do so with dollars—not debit cards. Not only does cash help with counting and math skills, but research shows people spend less when they use actual dollars rather than plastic.