No matter your household style, there are a few basic standards when it comes to money. Have you ever wondered what can we teach kids about finances? Let’s face it, this is the next generation we’re talking about. The future trail-blazers and proprietors of our country. They should know a little something about money, right? Correct! This post will show you how to give the kids a few monetary pointers and answer the questions that go beyond the term “responsibility”.
Along with this post, April is Credit Union Youth Month. We are celebrating by giving out free bookmarks and coloring sheets to kids in all of our Achieva branches. Make sure to stop by and pick some up!
It’s never too early to set good examples.
There is no easier way to break down this statement. In order to give your children a viable concept of money, and how to use it, parents must set a good example from the start. To teach kids about finances, we have to show them how to make wise choices, that money is a limited resource, and lastly, needs should be placed before wants. Now, obviously, we don’t want our children to become obsessive over their wallets but some open dialogue about spending can go a long way. It goes without saying, use discernment for your unique case and household.
Let’s teach kids about finances by prompting good choices.
Allowing a structured set of choices for your child will exercise their decision making skills, as well as boost their confidence. While going grocery shopping, pick two options for them to choose. Let them know each of the two items cost relatively the same amount; but alternative 1 gives them this amount, while alternative 2 gives them 1/2 as much. Works easily if you use this method with BOGO’s. (Buy one, get one free.) Let the child choose the one they prefer. Provide guidance as appropriate.
Then, explain that money is a limited resource.
The second part to this is to allow your child to freely spend a small amount of money. Let’s say $3. Explain that if they completely use all of their money then they will not have anymore to spend later. Do your best not to cave and do not provide anymore money once your child has made their purchases. Talk to your child and ask if they think they used their money wisely. If they had more, what changes would they make? Afterwards, discuss that money has to be earned and that financial responsibility will properly maintain the resource.
Last, dive into needs vs. wants.
A fun way to explain this is by using flash cards or pictures. Print out a few images of random items. Make sure to include a close amount of both needs and wants. Ask the child to sort them into two piles. Ask your child why each item goes into the particular piles and give gentle correction where needed.
As easy as one, two, three!
Remember, fun is the key to teach kids about finances. Make the lessons short, simple, yet frequent, until they grasp a clear understanding. Moreover, use the three steps explained above to open up your child’s perspective on money. Make sure to check back frequently to the Achieva Life Blog for continued tips and topics. Until then, all the best.