Teaching Financial Lessons at Home
Educating, motivating, and empowering kids to become regular savers will enable them to keep more of the money they earn, and teach them how to grow into financially responsible adults. The reward could mean a life free from the anxieties of debt.
We all understand the importance of financial literacy. The sooner we begin teaching lessons concerning finances to our children the better prepared they will be to handle money. Children need to learn the value of a dollar and the consequences of not saving. We can sit for hours reading or playing games with our children. However, children must be “literate” about money matters, too.
Learning how to think about money and manage it is an important life skill. Most kids learn by doing. So try some interactive games and lessons to engage them and maintain their interest. The more information we have as parents, the better we can provide the financial life skills to our children.
Children need to learn how to earn money, then how to save it or spend it. So, you can start by giving them an allowance or have them earn money doing chores around the house. Then you will need to talk to them about how much money they will need to save for a specific item or if they chose to spend the money, how to pick an item to buy. If it is a large purchase, like a bike or iPod, how much money will they need and how long will it take them to earn the money. Another idea is to save 75 cents of every dollar as long term savings, such as for college or a car and put aside 25 cents to save for the short term or to spend. This will help teach kids to save first and spend second.
Children learn by example, by following what parents and other adults do. This may be a good time to get our own financial house in order and set a good example for our kids. Let the kids join in on preparing the household budget; this will help them feel part of the team making family decisions and teach them how to manage their money.
Additional Resources for Parents and Educators: