Money Matters Matters: Fun Ways to Teach your Kids About Money
By Trevor Bush, Senior Vice President, Washington Federal
Money, money, money… It is what makes the world go round! Financial education both in the school setting and at home is of the utmost importance for our children to have the strong foundation they need to be successful. But studies have shown that our children are not getting the financial education they need at school. Hopefully that will soon change.
Earlier last fall, an Arizona state law was passed that will soon require all school districts to teach financial literacy skills. This comes just after a recent report from the Center for Financial Literacy that graded Arizona with a “B” on its efforts to improve financial literacy in high schools.
According to a survey done by the Council for Economic Education that focuses on the importance of teaching economics and personal finance, kids don’t know enough about personal finance. Why?
Children learn money habits mainly through watching their parents. As a parent, you want your child to understand how to balance a checkbook or be able to figure out how much money they should save and how much they should spend; so parents can help teach their kids about money by setting a positive example.
Aside from that, it’s recommended that parents use other creative ways to teach kids about financial literacy rather than just relying on school teachings or your own finances as examples.
Pull out the board games
Use popular board games like Life and Monopoly to help teach kids early about the concept of money. These games allow them to deal with real life situations like buying a house, paying bills and having a job.
Show them the money
Have spare change lying around? Show your younger kids what different coins look like. Pointing out the different distinctions in color, size and amount will help them have a better understanding of what money is.
Let them play money games online
Use video games and other electronic simulations to help teach kids about money. Many online websites offer interactive online simulations that use money-management modules to help students learn age-appropriate concepts around spending, sharing and saving money.
Teaching saving early
Helping your children open a savings account is a great way to start teaching your children about money. Saving at a young age is a wonderful opportunity to teach children about financial responsibility — a skill they will need in adulthood.
Other suggestions include:
• Set clear guidelines for what kinds of expenditures the money can be used for.
• Discuss “wants” versus “needs,” and saving and spending money wisely.
• Set a good example by budgeting your own finances (and sticking to that budget)!
• Consider requiring that some portion of the money your children earn as an allowance go into a savings account.
That brings up the issue of allowances. While there is no single correct way to approach allowances, decide when to start, how much to give, and whether you want to link the allowance to chores. Whatever your approach, it is critically important to start teaching kids of all ages how to be responsible with money. This is one life lesson that will stay with them for a lifetime.