How to teach your kids about money

EAST PROVIDENCE, R.I. (FOX Providence) - Raising kids who are money wise and not penny foolish isn't always easy. Do your kids know value of a dollar? By helping them to better understand money, you'll help them manage money.

Peg Marty, Executive Vice President of Citizen's Bank joined The Rhode Show to discuss how early should we start teaching our kids about money.

When do you we start teaching them?
A: It's never too early to help kids understand the value of money, but you should make it light and conversational, involve them in conversation. Think about teaching moments, for example, when you go to the grocery store, help kids learn how to make choices and let them know that everything is not available to them, that money has value.

Q: What are some real-life examples you can teach your kids about finances?
A: Every day involve them in budgeting and involve them in some very simple elements of household budgeting. Have them sit with you and make lists. For example, of things that you need to purchase. Have them talk about things that they need versus things that they want. And then they'll understand the difference. You can teach them how to make good choices about purchases that they might want to be involved in.

Q: Nowadays, you get credit cards and debit cards, even the monopoly board game uses the credit card. How do we prove to kids that there's money behind this?
A:

Take them to the bank with you and let them see what a bank is all about. Show them what it means to make a deposit into a bank, and then set up a bank account for them.

Piggy banks are great for young kids, it gives them a way to put their money away and they can see it and touch it and watch it accumulate.

Bank accounts are a little abstract for young children, but as children get older, bank accounts are great way for them to begin to start saving and understanding the value of saving.

Q: Should we just let them spend their money on whatever they want?
A: Every parent is different. It's a great idea when kids get birthday money or holiday money that you let them spend some of it on themselves. But you can also teach them to save for a larger gem or a future. So you have them spend a little bit now, and a little bit later.