Let Kids Learn About Money in Real Time – Starting Now!

At Let Grow we love to see kids doing more on their own: making breakfast, walking the dog, riding their bikes… But there’s an issue we haven’t focused on much: Letting kids develop some money sense!

Karen Holland, founder of GiftingSense.org (which is not about gifts – except the gift of financial literacy), says that teaching kids about money can and should happen far sooner than most people think. In fact, delaying the acquisition of “productive money habits” can hurt our kids in the long run. And short run.

So here are her suggestions for starting kids out EARLY on the path to “Mindful Spending.”

Many families fall into a familiar cycle: buying what kids ask for, rather than pausing to reflect on what will be the most helpful.

Here are four steps to help prepare kids for the financial decisions they face all year long. Because while there’s no perfect age to teach kids about money, there is a perfect time: whenever they’re eager to get something!

Consider having your kids:

We all want our children to become confident, capable adults who can sustain themselves financially. That means giving them room to make decisions, learn from mistakes, and understand how the real-world works.

Still, many parents are reluctant to “burden” their children with conversations about money or the responsibility of making shopping decisions. But why?

We learn the alphabet and then how to read. We learn our numbers and then how to add and subtract. But what comes before learning how to manage a budget, choose a credit card, or compare auto loans?

For many people, and certainly many kids, very little. Yet, mastering the basics is always what gives us the confidence to learn more. Why would learning about money be any different?

At GiftingSense.org, the financial literacy nonprofit I founded, we focus on helping young people become mindful spenders. It turns out that asking yourself simple questions about typical purchases  — before you spend your own money or anyone else’s — is a natural way to experience firsthand the fact that anyone can get and use financial information to improve their life by:

Ideally, all young people would be able to acquire this insight before the end of middle school. The timing matters because our money habits and beliefs are largely established by adolescence and tend to remain stable throughout our lives.

But aren’t kids too impulsive and thoughtless? No — they’re just inexperienced. So, we built a tool to give them real-life practice in asking and answering simple questions about typical tween/teen purchases, before anyone spends a dime. That tool is a free public good, available without registration. Not even a paywall! It’s called the DIMS SCORE® Calculator.

This calculator – actually a simple set of questions — helps kids decide “Should I buy or ask for this?” and observe the impact of a small amount of consistent thinking on their decisions. It meets kids where they are, right in the middle of wanting an item or experience.

For almost a decade, we’ve observed how letting young people work on personal finance problems that matter to them in real-time convinces them that financial knowledge is worth pursuing. It’s why we believe that early financial education is the simplest solution to financial illiteracy, income inequality, and maybe even climate change. Because once you know you can get and use financial information to improve your life — and others’ — why would you ever stop?

Raising money-smart kids really isn’t hard if you take advantage of all the small opportunities there are to let young people take the reins, maybe make a mistake, but ultimately learn how easy and rewarding it is to pause…before making a purchase.

Let Grow here: Learn more at GiftingSense.org. Their materials for helping school-aged kids to think before they buy are FREE.

And if you’d like to give your kids more freedom in general to learn from the real world (and mistakes along the way), here’s our Let Grow Independence Kit! Also FREE! That’s two good financial decisions for anyone!