No matter what age your children are, learning how to successfully manage money is a lifelong skill that will help them throughout their lives. Teaching your kids about money doesn't have to wait until they have their first job or they are moving out on their own. The sooner you build a smart financial foundation, the more successful they will be in the future.
With school right around the corner, here are some ways that you can incorporate financial literacy into their at-home curriculum.
Preschool and Kindergarten
- Use a clear jar to save. Piggy banks are great, but it lacks the visual component that is important for young learners. If they can see money going into the jar and watch it grow, it will help them understand the concept. Pro Tip: Get excited when they place money in the jar and tell them what each coin or dollar is. When you're engaged, they will become engaged.
- Be a good example. Young kids often learn by example. If they see mom and dad paying with a plastic card every time the family goes out to eat, or they see their parents arguing about finances, they will eventually learn that. Be mindful of the way you show your kids the value of money.
- Show them that things cost money. Sometimes, it's more than just telling your kids that things cost money. The next time you check out at the store, try giving your little one a few dollars and let them pay for an item. These little interactions are impactful.
Elementary and Middle School
- Explain opportunity cost. A lesson that you can teach your kids early on is opportunity cost, or in simpler terms, if you buy this, you won't have enough money for that. These decisions are important for them to weigh in on and can help them be more mindful about future purchases.
- Pay commission instead of allowance. The difference here is helping kids understand that money is earned, not just given. Through doing chores around the house, you will instill the importance of hard work and prepare them for the real world.
- Help them to avoid impulse buying. If your child has been earning a commission, the next time they ask you for a spur of the moment purchase at the store, remind them that they can have it, but only if they use their money. Also, encouraging them to wait a day before buying can help them understand that not everything they want is worth buying.
Teenagers
- Give them the responsibility of a bank account. This takes managing money to the next level. Opening a checking account for your kid to store their hard-earned money will be the first step to teaching them not to swipe their debit card any time they want and to check their balance regularly.
- Get them on a simple budget. With the convenience and accessibility of smartphones, downloading a simple budgeting app is another important step to teaching your older children how to split up their finances for different things. Even if it's as simple as saving a certain amount of their money, making a plan is important.
- Help them figure out how to make money. There are tons of breaks in the school year, and those are great opportunities for you to help your child find a job and earn some extra cash. You could even encourage them to become an entrepreneur. Yes - these days, teenagers can start a small business venture and turn a profit.
For additional youth financial advice and resources, visit www.telhio.org. Our Art of Allowance Program gives
kids the money know-how they need to succeed.
