Kids Financial Literacy

We all want to encourage our children in ways that help them become self-confident, motivated and strong in the face of a rapidly changing world. Ultimately, we want them to be safe, happy and well-adjusted and teaching kids about money can help with that.

If you start the conversation about spending and saving at a young age, key principles will become deeply rooted. Looking for ways to teach children to save? Here are some ways to get started.

Talk about money

Early memories are imprinted for life, and money memories are no different. Here’s one idea for how to teach your child financial responsibility: When you buy things with credit cards in front of your kids, show them the resulting bills compound interest and all. It’s a natural way to start building financial literacy for kids. With a real-life example, they can start to understand the real costs involved and you can start a conversation about the difference between wants and needs, too.

Make it visible

Financial literacy for kids has never been more important since we are living in an increasingly cashless age of credit cards and one-click digital transactions. There’s value in exposing kids to coins and dollar bills especially as you think about how to teach kids to count money. Consider buying them a piggy bank they can fill with quarters and dimes. This will help them appreciate the physical act of saving. You could even consider using this strategy for teaching preschoolers about money. As they get older, you can teach children to save by opening an account with them at a brick-and-mortar bank branch. Encourage them to deposit some of their weekly allowance in the account, and share their statements so they can see any interest they earn.

How to teach kids about budgets

Most people learn to live on a budget after leaving home, but you can give them a head start if you teach children to save for such things as movie tickets, gas and that monthly stop at the vintage clothing store.

Teach them the value as well as the cost

You spend money on things that you value, so in a way your spending habits reflect your values. Giving back to others may be important to you and your family. If so, encourage children to donate their money to causes they think are important. When their funds are limited, they can still give back by donating their time. Not everything of value has a dollar amount associated with it.

If younger children want to start a business to meet a community need, chat with them about what it means to be a social entrepreneur. Show them how they can design a business that addresses a cause or issue and uses sustainable practices in keeping with their values. They may even want to donate a portion of their profits to the cause their business model supports.

Financial education for kids starts form young when kids are between 7 to 9 years old. Youth who are not taught how to manage, value, and work for money lack the skills they need to be self-sufficient. This situation has impact not only on the child’s future finances, but also self-esteem, relationships, and overall enjoyment of life when he or she matures into adulthood.