Six Ideas to Make Money Fun for Kids

Instilling good money habits in your children is arguably one of life's most important
lessons. Fortunately, with today's technology, there are many ways to make learning
about money fun for kids of all ages.

Teaching your kids about money should start as early as possible. "As soon as your
child starts asking for things, I think it's time for them to understand that things
cost money," says Anton Simunovic, founder of ThreeJars.com, a website dedicated to
teaching kids about money management.

But what lessons should you start with? Neale Godfrey, author of Money Still Doesn't
Grow on Trees: A Parent's Guide to Raising Financially Responsible Children, suggests
beginning with the concept that money must be earned. "There's no entitlement program
in life," she says. "Kids need to know that they can't just whine for a toy in a store
and automatically get it."

As kids begin to learn about money, parents shouldn't feel intimidated. "The topic of
money shouldn't be something that's taboo," says Jayne Pearl, author of Kids and Money
Guide to Learning Capital. If you're uncomfortable talking about it, she says, it won't
be an enjoyable experience for the kids.

You should also be careful not to argue about money in front of your kids.
"If the parents are constantly arguing about money, their children are going to view
money as a source of stress," says Jon Gallo, who coauthored the book The Financially
Intelligent Parent with his wife, Eileen.

1. Use cash. Showing kids purchases with a credit card won't do much good, the Gallos
say. "Don't [buy items] on credit cards or with checks, because that's completely
abstract," says Eileen Gallo. "Let your kids hold the money and see the money leaving
their hands."

2. Utilize a piggy bank for the 21st century. A traditional one-slit piggy bank doesn't
teach kids much about money management, says Susan Beacham, CEO and cofounder of Money
Savvy Generation in Lake Bluff, Ill., a company that helps parents and educators teach
children to make good money choices.

"A lot of times, piggy banks make kids very distrustful," she says. "If kids can't see
through it, they don't trust that the money is in there." So Beacham developed the
Money Savvy Pig, a see-through piggy bank with four slots: save, spend, donate, and
invest. With the Money Savvy Pig, kids learn that money isn't just accumulated to buy
things.

3. Take advantage of the Web. The Internet is full of age-specific money games for kids.
Just last year, Sesame Street and a bank teamed up to create fun videos and games that
teach kids about money. Many children will find it easy and exciting to learn about
money from Elmo and his friends.

4. Let them play games. Beacham says games are an excellent tool for approaching the
topic of money with kids. "Games become something you can use to open the discussion,
so it's not always you preaching about money," she says. Grade-school children can play
Planet Orange at OrangeKids.com. In the game, kids travel through the planets by
completing certain jobs to earn money for gas.

5. Empower them to manage their own money. Let your child play an active role in how
money is used by offering them an allowance. But consistency is important: Many parents
promise an allowance to their kids but don't deliver. If parents forget to pay the
allowance, children learn that money promises can be broken. Beacham says this can
potentially lead the child to think somewhere down the road, "Hmm, maybe I don't have
to pay my credit-card bill on time this month."

6. Encourage them to give back. Giving to charity is fun for kids because they are
instinctual givers, says Beacham. In addition to having your child donate money
(to a charity of their choice), make philanthropy more enjoyable by getting the whole
family involved. Volunteer together or participate in a fundraiser at the neighborhood
park.

Above all, don't be afraid to talk to your kids about money. Says Godfrey: "Our kids
see us handling money every day, but we often forget to talk to them about what we're
doing."