Kids aren’t born knowing about money, how to earn it, or the importance of saving for a rainy day. Unless you teach them otherwise, your children might not understand how vital financial management is for a successful future. In a world where mountainous credit card debt is far too normalized, learning about these issues has never been more important.
If you think financial matters are far too boring to hold your kids’ attention, think again. Here are three fun ways to teach your children about money management so they’re more likely to grow into fiscally responsible adults.
1. Provide Hands-On Financial Learning
Doing something yourself is often a better way of learning than simply being told how to do it. Think about when you learned how to tie your shoes. You probably followed along while someone else showed you how to accomplish the task, step by step. If you only listened while someone explained the process, you might not have ever mastered it. Taking action is key to acquiring nearly any new skill, and it’s no different with money management.
Most children are bound to get bored listening to a parent drone on about earning and managing an income. That’s why it’s so important to give them hands-on learning opportunities. One great way to do this is by enabling them to open a bank account with an associated debit card. Teach them how to set a budget so they never use more than what’s in their account. Help them understand the need to balance their account regularly so they always know how much money they have.
If you aren’t very good at teaching financial basics, let tech give you a hand. There are exciting new apps out there that teach financial literacy for kids in an entertaining way. They gamify money management and show kids that being responsible with money can actually be fun. Such apps are perfect for parents who want their kids and teens to learn how to be accountable with their cash.
2. Teach Money Basics During Family Outings
On average, young American adults ages 18 to 23 have over $9,000 in debt. While much of that can likely be attributed to life-launching expenses such as college and car loans, it’s still a daunting amount. That’s especially true when you consider people in this age group probably don’t have a great-paying job yet. It could take these individuals many years to pay off what they owe, especially if they continue adding to that sum. Young adults will be better able to take on and pay off debt responsibly if they’re taught money management skills at a young age.
You don’t need to give a boring lecture to help your kids learn the importance of fiscal literacy and responsibility. Every family outing can potentially become an immersive money management classroom without your kids even realizing it. For example, the next time you go to the grocery store, let your kids do the shopping. Give them a grocery list and a budget, then let them fill the cart without any intervention from you. If they successfully stick to the budget and get all the items on the list, reward them with a treat.
Another great way to teach your kids money wisdom is to let them plan the next family activity or outing. Give them a strict budget per person that they must not exceed. Then have them research local events or activities and choose one that’s within budget. This activity will be an engaging challenge for them, while teaching them not to spend money they don’t have.
3. Read Money Books for Kids
There are millions of children’s books on bookstore and library shelves, and many of them are written primarily for entertainment purposes. There’s nothing wrong with letting your kids read books that are just for fun — in fact, you should encourage it. But it’s also wise to throw in a few educational selections as well. Fortunately, there are plenty of books that teach kids about money in creative, entertaining ways. Here’s a list of 10 books U.S. News & World Report recommends for their ability to set kids up for future financial success.
It’s important to select age-appropriate books for your kids if you want them to enjoy the learning process. Some books are ideal for very young kids because they teach basic money terms in simple, relatable ways. They go over financial fundamentals like earning money, establishing a budget, and understanding credit basics. These types of books are great for kids in grades 1-5.
To help your older kids and teens learn how to manage cash, look for volumes that go into more depth. Books that use engaging graphics and straightforward language can teach the importance of saving and investing, for example. In the right hands, difficult concepts like earning interest and investing in the stock market become much easier for kids to understand.
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Giving Your Kids the Financial Knowledge They Need to Succeed
The things your children learn about money at a young age can help determine their financial future. Kids who are taught to steward their allowance and/or part-time job earnings wisely typically grow up to become financially responsible adults. In a world where instant gratification and ruinous amounts of debt are all too common, these skills are essential. Use the strategies above to help your kids master financial management in fun and effective ways.