According to studies, nearly 53% of adults have anxiety surrounding their financial matters. This anxiety is largely due to a lack of education surrounding financial literacy.
So, how can we begin talking about money with kids so that they are able to learn the basics surrounding finances and become financially literate? We have laid out a few ideas and tips on how to talk to kids about money in a way they can understand.
Teach Savings Early
It can be tempting for kids to take the $20 they got from their grandma or the $1 they got from the Tooth Fairy and spend it all at once. However, the earlier kids can learn the benefits of delayed gratification, the better. We recommend teaching kids to try and save at least 10% to put into a bank account that remains untouched. They’ll be able to see the amount build after time, which will hopefully build excitement as well as good habits.
Focus on Earning
Saving is important, but in order to have money to save your money, you have to earn some. If your kids are interested in earning money, encourage them. Help them to open a lemonade stand, wash cars, or even sell some of their older items at a garage sale. A great work ethic learned at a young age can go a long way.
Many kids do not know the value of the dollar. They also don’t always know where their money goes. Have your kids right down their purchases each day to help them track where their money goes. This is a great way to prepare your kids for learning how to budget, too.
Teach the Value of Giving
Teaching your kids to be generous with their money is also a great way to correlate finances with charitable giving. Give your kids access to information about various charities or organizations so they can choose a cause that they want to support. They can give a little at a time, or they can save up to make a larger contribution. This is a great instill the value of helping others with your children.
Make it a Game
Games are a great way to help kids learn about money concepts with little to nothing at stake. While it may sound silly, even playing Monopoly with your kids will teach them how money exchanges work as well as the importance of spending wisely. You can also have a pretend grocery store so kids can see how much they can afford at one time.
Look for Deals
Kids can have a one-track mind when it comes to purchasing something they want. Help them to shop the sales, compare prices on various sites, and when to buy new vs used. Helping your kids to discern purchasing decisions from a young age will pay off in the long run.