Creative ways to teach kids about finances

Does your children's financial knowledge stop at "money doesn't grow on trees"? Fortunately, you can teach them about finances—and the importance of saving for a goal like college—and make it fun. Start here.

Divvy it before they can spend it
If your child gets an allowance (or a paycheck from a job), there's an easy way to illustrate how to budget. Get three jars (or piggy banks) and label them "Save," "Donate," and "Spend." As soon as your child gets money, have him or her immediately divide the cash into the three containers, following a set percentage you've agreed on. For example, you may suggest putting aside 10% for the child's charity of choice and 25% for saving or investing—leaving the remainder to be spent.

Bank on it
Your kids will need a place to put their saved money, so look for banks in your area that offer "kid-friendly" accounts. Some banks let you open savings accounts for kids with a small minimum investment, while others may offer services like free coin counting so you can easily convert loose change into savings.

Show them the cash
You use coupons and scour the internet for good deals before buying anything, right? To show your kids how your extra efforts pay off, track exactly how much you save for a set period of time, like a month. Then go to the bank and withdraw the amount you saved and place it on the kitchen table. Seeing a pile of money representing your coupon savings should make an impact on your kids—plus you'll have a built-in dinner conversation topic.

Take stock (ownership)
To illustrate the concept of owning stock, look up the ticker symbols of some of your kids' favorite companies and show them that a stock is priced throughout the day. You may even help your kids buy a few shares of a company, and together you can watch the price go up and down and talk about what makes a company do well.

Get really creative
Sometimes you just have to speak their language to get your point across. If you've got a teenager who won't put down the phone, try sending him or her texts to reinforce your money talks: "Got paid 2day? TTYL about how much 2 put in ur bank acct."

Just do it
Teaching kids about finances doesn't have to be difficult or boring. With a little effort—and creativity—you can reach your kids.