Saving and Helping your kids to understand money and its value

This post was underwritten by BMO Harris Bank, which offers a matching $25 on a new savings account opened for your child through their Helpful Steps for Parents program. Learn more at bmoharris.com/parents.

Have I ever mentioned that we have a huge money tree in our back yard?  Anytime we need something we just run right out there and pluck some money off of it.  Car breaks down, no worries just hit up the money treat.  Unexpected medical bills, NOT A PROBLEM...money tree!

Oh wait, no, we don't have a money tree, my kids just THINK we do.  It's a pretty common misconception, really but it's one that needs to be addressed head on.  And the earlier, the better.

We have tried a variety of different ways to teach our kids about the value of money.  Sometimes it seems to work and other times, it's clearly NOT.  One the days when my (almost) nine year old explains to his brother that if they want to be able to go to somewhere fun over the weekend, they shouldn't whine about not getting to but a new toy when we're at the store, I feel like I'm winning the battle.  But when my seven year old tries to convince me that we can afford to buy something because I still have checks in my check book, clearly we haven't won the battle just yet.

Some of the ways I like to try and work on this subject with them are:

• Letting them keep their own wallet with their own money.  They have had a wallet since they were little and have been allowed to make choices about what they physically do with their money. If they get money as a gift, I always suggest that they put it straight into their wallet.  Sometimes they listen. Sometimes they don't! And on at least one occasion the have wound up losing their cash.  Trust me THAT is a lesson that sticks with them awhile and the next time they get money, they are thrusting it at ME to put away safely before I even say a word.
• Letting them make their own purchasing decisions.  When they have money burning a whole in their pocket, I always suggest that they wait before spending it.  If there is something I know they have been wanting I suggest that they save the money toward that purchase.  And while I never take them out immediately to make a purchase, in order to give them some time to sit with a decision.  In the end it is up to them to decide what they will spend their money on.  Sometimes they buy junk and are disappointed in their decision.  But again, the next time they have money they remember this and think longer about what they really want to do with their cash.
• Letting them help with family spending decisions and shopping.  We started early on, taking the kids shopping with us and showing them how WE make everyday decisions.   They know how to read a store shelf tag to decide whether the larger sized grocery items are in fact a better deal or not. 
• Leading by example.  I DO believe this is the biggest factor.  I try to model for them delaying purchases and saving money.  My kids know that we have a savings account where money is kept for emergencies like unexpected medical bills or cars breaking down.  They know that this isn't something we touch just because there is something we want.  They also know that we work on a weekly budget and that if we splurge at the beginning of the week (like going on an outing over the weekend) that we will have to tighten our belts later in the week (like cutting out pizza night).
• Lastly, we try to reinforce to our kids that things don't make you a better person.  While we have plenty of high tech toys in our house, we regularly discuss that the things you have do no equal who you are.  Being a good person who treats others well is more important than having all the best "stuff" any day.

Disclosure: I was selected for this sponsorship by the Clever Girls Collective. To learn more about BMO Harris Bank, visit their website http://bmoharris.com/parents.