Financial Skills for Kids: 101
Despite what our kids may believe money does not grow on trees (Seriously. I wish). Mom and Dad are not ATMs. Teaching them money management skills early on can help them gain an understanding of the importance of saving money and how to be wise with purchases. This knowledge will pay off handsomely in the long run as your children mature into adults.
Teach your kids the basics
Financial literacy is an essential life skill that many should learn at home. Parents are a child’s first teacher regarding money and often we model what type of relationship one should have with money. One easy way to start is to teach the basics is through play with games like Monopoly, Payday, Life or Moneybags. These games encourage basic money handling and counting skills.
Saving money at any age
If you have a child that is preschool or kindergarten age, start with an old fashioned glass jar. Get your kids in the habit of placing any spare change or portion of their allowance aside. The glass jar will allow them to visually see their money grow and will encourage them to continue this practice. Small steps can add up in a big way.
If your child is school-aged (elementary & middle school) and gets an allowance, tie their earnings into their completion of chores around the house based on a commission. This will start to plant the seeds that money is earned and not given. Kids at this age can often be fixated on the newest shoes, clothes, etc. Start to stress the importance of giving unto others at this age as well. Volunteering their time at a homeless shelter or at a retirement home is priceless are low-cost and anyone can help.
For high-school students, it is critical to begin giving them financial responsibilities. Opening a bank account will challenge them to take their money management skills to the next level and encourage them to make sound and responsible fiscal decisions. Another recommendation is to have your child start saving for college as well. Instead of spending their money on clothes or makeup, guide them to save a portion for school a bit for fun too.
Teaching them to Budget
How do you start to teach kids about budgeting when you are the one with money that creates the household budget? If your child is middle school age or older and you are comfortable sharing your financial information, let them view the household budget to show the details regarding typical expenses that you pay for each month (electricity, groceries, mortgage). Your child will begin to understand a bit more about why Mom or Dad cannot pay for $200 pair of sneakers as financial decisions are made together.
How did you learn to make financially sound decisions? What is one thing that you wish you knew today that would save you from financial mistakes of the past?Sources:
www.daveramsey.com- 15 ways to teach kids about money