4 Tips for Teaching Kids About Money

The Parent Is in Charge

It can be tough to convince a kid, especially one with few wants, that it pays to save. What’s the incentive if she wants an American Girl doll and Grandma is asking for her holiday wish list? Some experts suggest parents pay an above market interest rate on the dollars saved. That way kids can see a sizable change in short order, driving home the point that saving is worthwhile. If all else fails, you can always pull out the “Because I said so” card. According to Dungan, parents “have veto power over any spending choice their child makes—especially if a pattern of spending is emerging that’s only about ‘scratching the itch’ of immediate gratification.”