4 Tips for Teaching Kids About Money

Mistakes Are to Be Expected

Most experts say it’s normal—and healthy—for kids to make money mistakes. “They should be allowed to make their spending errors,” said Dr. Mary Gresham, LearnVest’s psychology of money expert. After a couple of weeks, ask your niece if she is pleased with the Silly Bandz purchase, or if most of them are misplaced, torn or stretched out of shape. If she clearly wishes that money was still burning a hole in her pocket, then ask “How will she change it next time?” Gresham suggests. Nathan Dungan, who works with kids and parents on this very issue as founder of Sharesavespend.com, would step in if the child routinely makes the same mistake. “But rather than shift into lecture mode, engage your child or niece in a conversation about the choices they made and more importantly, why they made those choices and what impact they have on their ability to save.”