When it comes to the most important life lessons you can teach your kids- financial education for kids comes on first number, being responsible with money ranks pretty high up there. Shopping for groceries. Paying taxes. Buying a house. Almost every aspect of your kid’s adult life will revolve around healthy money habits.
But many Americans don’t have a solid grasp on how to use their money responsibly. Nearly half of Americans don’t have enough cash to cover a $400 emergency, and a third have saved nothing for retirement. Meanwhile, more than 60 percent of young adults under 34 say that thinking about their personal finances makes them anxious. In many cases, these young adults feel anxious about their finances because they never learned about money growing up. Fewer than 20 states require high school students to take personal finance classes, even as studies show that young Americans want to learn about money and wish they had learned to be more financially savvy in school. That’s where you come in. Giving your kids real-world lessons at home on how to manage their finances will go a long way toward helping them stockpile plenty of savings, stay out of debt and maintain healthy credit scores. Read on to learn the critical money lessons you should teach your kids at every age, from their toddler years to their teen years. Table of Contents
Start With Yourself: Be a Good Example Smoking. Drugs. Bullying. All of these are topics that parents say they would rather discuss with their kids than the family’s finances. Maybe you have struggled with using money responsibly in the past. Maybe you don’t want to tell your kids how much you make or reveal that you’re in debt. But it’s important that you become comfortable with talking to your kids about money so that they become comfortable using it. Brush Up on Basic Financial Concepts Pop quiz! If you take out a loan for $1,000 with a 20 percent interest rate, how much will you owe per year in interest? The answer is $200. Did you know that? If not, you’re like almost two-thirds of Americans who have trouble calculating interest rates. Take some time to brush up on basic financial concepts. Make sure you understand these topics inside and out so that you can answer your kids’ questions and provide the most well-rounded lessons possible. Get Out of Debt Every good lesson in using money responsibly starts with reducing or eliminating debt. More than 40 percent of American households have credit card debt, and the average debt among those households is more than $5,000. Since you will be teaching your kids about avoiding debt, you should set a good example and make sure you have paid down your debt first. Kids are more likely to practice healthy borrowing if they see their parents also doing so. Set Family Financial Goals In some families, one spouse takes the lead when it comes to handling the finances. Maybe your partner handles the bills, the family’s bank accounts, and the tax records, while you manage other aspects of the household. If this is the case for your family, it’s still important for you and your spouse to sit down, go through the family’s finances and get on the same page. This way, you can better understand your family’s financial goals and communicate them with your kids. It’s also helpful to write down your family’s financial goals and display them in a prominent place in the home. For example, if your family wants to go on vacation later in the year, you could post that goal on the refrigerator to remind everyone why the family is saving. Protect Your Kids Another important component of putting your kids on the best financial track possible is thinking about what would happen if you could no longer take care of them. Even though most Americans have life insurance, a good chunk do not have enough coverage. About half of Americans have $100,000 or less in coverage. It’s recommended that you have coverage equal to at least 10 times your salary. With kids, that multiplier should typically be even higher. Also, make sure you have a will to ensure that your assets are properly divided and that your kids are cared for should something happen to you. Younger Than 3 At this age, your kids likely just learned how to throw a ball overhand or to scribble freely on paper. They have no idea what money is or how it works — but that doesn’t mean you can’t introduce them to some basic money concepts. Allow them to play with coins. Play store to introduce them to the concept of a marketplace. Even allow them to watch you pay bills. This helps them understand that money has a value and that items vary in cost. Coin Identification Game Show your toddlers different types of coins. Allow them to trace the outlines of the coins onto a piece of paper. As you color in the shapes that you traced, help them to match the coins to the drawings and repeat the coins’ names. Coins are more fun for toddlers to play with than paper money, but you can also draw dollar bills and color those in to include in your toddlers’ homemade “wallets.” The Play Store Using the pretend money that you created from the coin identification game, gather a bunch of household items and allow your toddler to exchange the money for the items. Kids already love playing store for the fun of it, but take this opportunity to show them that different items require different types of pretend money. For a twist on the traditional game, decorate price tags and attach them to the items. Toy Calculator and Checkbook Toddlers are always watching you, so why not use that to help them learn about money? When you’re paying bills with your checkbook and calculator, let them know that you’re buying things just like they do when they play store. For even more fun for your toddlers, give them their own “checkbook” and calculator to play with while they watch you. Ages 3 to 5 By kindergarten and pre-kindergarten, your kids have already seen you give something green to the pizza delivery driver or put down a piece of plastic on the table at the end of your dinner at a restaurant. It’s your job to answer their questions and explain to them that they need money to buy things. As they reach school age, you can even allow them to manage a little bit of money on their own by way of allowances. It’s up to you whether the allowance should be earned or given, but the important thing here is to teach your kids to save and to help them understand that they may need to wait before they can buy something. Saving, Spending, and Sharing Jars Gather three clear jars and ask your kids to decorate labels with “saving,” “spending,” and “sharing” for the jars. Piggy banks are great, but you can’t see what you’re putting in them, and you want your kids to be able to see the progress they’re making! Explain that everything costs money. The money in the “spending” jar can be used today to buy anything your kids want within reason. If they want something that is more expensive, they will have to wait until their “saving” jar has enough money in it. You can also encourage your children to put a couple of coins or a dollar bill or two in the “sharing” jar, and help them think of charities for the money. Needs vs. Wants Shopping Let’s say your kids want a $10 stuffed animal. Help them count out $10 from their jars. Have them take the $10 to the store and hand the coins and bills to the cashier. Allow them to see how much money is left in the jars, and explain to them that if they spend money this time, they’ll have to wait a little bit before they can buy something again. If they don’t have enough money in the jars, help them understand how much they have and how long it will take to save enough for the stuffed animal given their current savings rate. Imaginary Restaurant What kids don’t like to play restaurant? At the end of the game, remind them that they can’t leave the table without “paying” the bill. This is also a good opportunity to introduce your kids to the relative value of coins and bills. Show them that one-dollar bill equals ten dimes or four quarters. Ages 6 to 10 While teaching kids about money is critical at every age, this age group is especially important. Researchers believe that kids’ money habits are formed by the time they turn seven. Give them a firm foundation in protecting their money in savings accounts (and earning interest), shopping around for the best deals and understanding the different ways that money can be spent or shared. Opening a Savings Account Take your kids with you to the bank. Explain to them that putting your money in a bank is better than stockpiling money at home because a bank protects your money and pays you interest. Explain that the bank pays you interest as a reward for keeping your money in that bank, instead of at another bank. Also, explain that interest is a cool concept because it keeps growing the longer you keep your money in the bank. You can illustrate this concept by asking your kids to set aside $1 from their allowance. Tell them you’ll act like the bank and pay them 10 percent, or a dime, in interest for this $1. They’ll now have $1.10. Explain to your kids that you’ll pay interest on this $1.10 in a month and that they’ll receive 11 cents instead of just a dime. Allow them to see how interest keeps adding up! Coupons and Comparing Prices It’s surprising how much your kids can learn about money at the grocery store! If you use coupons, ask your children to help you clip them and identify the corresponding products at the store. Make sure they watch as the cashier scans the coupons and shaves dollars off your bill. Additionally, look closely at the unit prices of products. Ask your kids to help you determine which products offer a better deal (a lower price per ounce, for example). This is also a good opportunity for your kids to practice their basic math skills. Career Exploration It’s important for kids to know that money is not just spent on physical goods, like food and toys. Explain to them that money is also spent on services, like labor. This is a good time for you to tell them what you do to make money and encourage them to start thinking about what they might want to do when they grow up. Charitable Giving Since many of your kids’ money habits will be formed during this time, make sure to explain the importance of giving back to their communities and to those in need. You’ll want to tell your kids that they are part of a larger community and that everyone in the community is responsible for those around them. This includes a responsibility to give your time and some of your money to community causes. Help them connect with a cause they might care about, like a local animal shelter that rescues stray cats or an environmental group that plants trees in the local park and explain that they can give some of their money to help others. Helping them to understand that not everyone has the money they need will help them appreciate their money and grow to be more giving adults. Ages 11 to 13 Your kids have already opened savings accounts and have seen how money seems to show up out of nowhere. It’s time to explain how compound interest works and explore other places to store your money. They also can begin to learn more about the worth of objects around them. Exploring Compound Interest Finally! You get to share the wonders of compound interest with your kids. Play around with a couple of classic examples that show that savings can really add up, but only if you start saving early. For example, if they save $100 every year starting at 14, they’ll have $23,000 when they’re 65, but only $7,000 if they start saving when they’re 35. Encourage them to play with an online compound interest calculator that allows them to input the specifics of their bank accounts and play around with different time periods and interest rates. Investment Games Show your kids that you can store your money in other ways that could make you more money than a traditional savings account. However, be careful to warn about the risks of losing more as well. Have your kids pick out a couple stocks that relate to their favorite hobbies. Track how the stocks perform every week for a given amount of time and award a prize (maybe a pizza dinner or a movie night) to the winner. Yard Sales Your kids should have a pretty good grasp on how to value different objects already, but allow them to develop these skills even further with a yard sale (and clean out your basement in the meantime). Put them in charge of planning the yard sale, finding things to sell, setting the prices, and interacting with customers. Ages 14 to 18 By this point, you’ve helped your kids learn about money for more than a decade. Now it’s time for them to start working and thinking about college before they eventually go off on their own. Be prepared to answer many questions during this time, as there are many essential financial You’ll need to cover everything from paychecks to checking accounts, credit cards, and social security. Breaking Down the Paycheck As your kids earn their first paychecks, they might not like what they see. The total might not match the amount they had banked on earning. Now’s a good time to explain taxes. Explain the different types of taxes to them and show them where the taxes go, whether it’s to Social Security or Medicare or elsewhere. Also emphasize the importance of saving and encourage them to open an individual retirement account. Perhaps your daughter or son will want to make some extra cash. Encourage them to be resourceful and help them look for opportunities like babysitting or selling old clothes. Debit Cards Before your kids head off to college and eventually open their own checking accounts, they might want some practice at home. Consider opening a joint account with your kids to give them access to a bit of money. You can monitor their spending using online apps and ensure that they’re making healthy financial decisions. Their names can also be on the checks associated with the account. Take this opportunity to teach them about writing checks and balancing checkbooks. Credit Cards Kids can’t enter into legally binding contracts, such as credit card agreements until they are 18. One way around this is to add your kids as authorized cardholders under certain circumstances. Whether or not you give your kids access to your credit cards at this point, you must teach them to use credit cards responsibly. Explain that they should use a credit card only if they can pay off the monthly payment in full. Talk about the dangers of debt and how missed payments decrease credit scores and make it harder to secure loans. Finally, stress the importance of exercising caution and avoiding suspicious websites when entering your credit card number online. Social Security Numbers It’s likely your kids will be asked repeatedly for the last four digits of their social security numbers. Make sure they memorize all of the digits before they go off to college so that they’re not caught off guard. Every parent wants their kids to be financially healthy — to have plenty of savings, know how to budget, and avoid the troubles that come with bad credit. But your kids won’t know how to be savvy with money on their own. Take the time to teach them good tips at every age and set them up for success.
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Brainstorm solutions for potential situations with your teen might encounter ahead of time. Whether she’s going out with friends or you’re leaving her home alone for the night, ask her how she might handle certain issues. Ask, "What would you do if your friend handed you a cigarette?" or "What would you do if someone knocked on the door and said he was a repairman who needs to come in?" Talk about the fact that we all make mistakes sometimes. And owning up to those mistakes shows responsibility. Tell your teen if she tries to cover up her mistakes by lying or covering up her mistakes, you'll know she's not ready to handle more responsibilities. Create a Schedule With Your Teen Most teens have a lot going on and they need a little support with time management to behave responsibly. Sit down together and look over your teen's schedule. Talk about how much time she should set aside for chores, homework, and extracurricular activities. Talk about how she can create a schedule that works best for her. While one teen might want to do homework right after school, another one might want a break for an hour before diving back into work. During the digital age, your teen doesn't necessarily need a paper calendar. She might find an app or online calendar helps give her the reminders she needs to be responsible. When she forgets to do her chores or has to stay up late to get her homework done, look at her mistake as an opportunity to problem-solve how she can do better next time. Helping her create a schedule for herself will teach her the time management skills she needs to thrive in the adult world. Encourage Your Teen to Help Out Doing chores shows responsibility. But going above and beyond regular household chores is a great way for your teen to become more independent. Teach your teen to give to the community in some way. Volunteering at an animal shelter, participating in community clean-up efforts, or fundraising for a good cause can help your teen feel more responsible—which will encourage him to behave more responsibly. Giving to the community will help your teen see that he has the power to make a difference in someone's life. It's good for his self-esteem and it will help him become a proactive adult who is invested in solving problems and supporting others. Teach Life Skills It can be easy to assume that your teen is on the path to becoming independent because he excels on the soccer field or because he gets his homework done on time. But just because your teen is doing well in some areas of his life doesn’t mean he’s ready to take on the responsibilities of the real world. Make sure you’re investing time into teaching your teen life skills. Practical skills, like how to do the laundry and how to cook meals, are important. But it’s also essential to make sure your teen knows how to manage his money as money management for children is really necessary also it is important to understands how to communicate with other people effectively. While your teen may pick up on some of these skills simply by watching you, she won’t learn everything through observation. Proactively teach your teen how to manage a household and how to solve real-life problems. Be Clear About Consequences There will be times when your teen makes mistakes (or even purposely breaks your rules). Make sure that her poor choices lead to negative consequences. Logical consequences, like the loss of privileges, can be effective teachers. Resist the urge to make excuses or rescue your teen from her mistakes. Sometimes, natural consequences can serve as the best reminders to make a better choice next time. It’s hard to watch your child grow up and realize that she won’t be your little baby forever. However, you’re doing your teen a disservice if you don’t instill a sense of responsibility. In the long run, your teen will thank you for turning her into a responsible, independent adult. Children are not usually included in discussions around the household budget or decisions around which stocks to invest in. And, it’s not usually on your ‘To Do’ list about teaching kids about money. More’s the pity. Because, if they were, they would be set up for life.
How do I know that? Because I was one of those kids that was involved in money discussions at home, and I learnt all about investing and saving during my formative years. I recall being around 6 or 7 and sitting in with the discussions between my Dad and his “financial advisor” from Allied Dunbar. At that time, I didn’t have anything substantial to contribute, but everything they discussed went in and this kind of thinking became the norm with me. I also remember my parents teaching me about compound interest when I was around 12. I distinctly remember being fascinated that money made money, all by itself! It really intrigued me and I used to sit in my bedroom, drawing up different computations using different interest rates. A strange child, perhaps, but the knowledge was all building. It wasn’t really like I was sat down and ‘taught’ what to do – it was just part of our lifestyle, that I picked up organically, simply because it was all shared with me, rather than conducted behind closed doors. So, how did this early education translate into my behaviour as an adult? Well, pretty substantially, actually. To me, investing is a key part of my life. It is something I attend to every day and it feels just like cleaning my teeth. It is that habitual. It is also something I really enjoy… perhaps because it also reminds me of times spent with my Dad, who is no longer with me. The impact of this is of course financial. Just like that child that was so intrigued by the phenomenon of money making money by itself, I of course now realise that there is so much more to it than that, but to me, it is still a case of me putting money into something which pays me, without me having to work so hard to get it. Yes, I have to research what I want to invest in and monitor the results and make decisions about what to do next. However, when I worked as a researcher, I had 17-hour days and really felt that I earned every penny. Other than your job or your business, there are very few ways that most people have access to this kind of regular, separate cash injection into their lives. This is my biggest bugbear as none of what I do is difficult and I was never particularly talented at maths at school. But, I see people struggling all around me, trying to make ends meet. I see personal debt increasing as people try to deal with the day-to-day struggles. And the debt that is most turned to is credit card debt, the most expensive of all and the most insidious because it is present in most people’s lives, but able to completely destroy you. How? Because they too use compound growth, but the compounding is working against you, and you are the one paying the credit card’s ever-increasing fees. The average personal credit card debt is £2700 in the UK, $4200 in Australia and a whopping $8400 in the US, and it is only set to get worse. The key to getting anything done in life is showing up, making decisions and taking action. Where energy goes, results flow. But, the first step is involving your children in day-to-day financial decisions. Like deciding how to choose the most cost-effective items in the supermarket. How to delay gratification by waiting for things rather than having everything now. And by grasping the concept of compound growth. If this is something you as an adult need to learn, learn it now, to be able to give that gift to your children. Believe me, money sense is the best gift of all to give a child. If a child learns that, you know that they will never go hungry. What better to allow a parent to sleep well at night and when they are all grown up, to know that it’s been a job well done. Compounding works best the longer it is working. Starting as a child gives it the best runway to ‘do its thing’, so get them started young – truly, the younger the better. Games centered around money management for children and can make excellent teaching tools for parents who want their children to learn not only what money is, or how it's used, but how money is built on math. Playing money games with your kids encourages them to ask questions about the value of money and become more comfortable managing it. According to recent paper on "the power of play", researchers found that the skills children learn through play in the early years set the stage for future learning and success from the kindergarten classroom to the workplace. Parents who play money games with their kids can help them learn and practice cognitive skills including: language, problem solving, creativity, and self regulation. Here are five game ideas to get you started: Board Games Many kids still love board games because they allow the whole family to play together. Some of the best board games to teach your children about money management are:
Each of these games has a slightly different emphasis, and some are more conceptually complex than others—so check to be sure that the game you select is appropriate for your child's age and areas of interest. Learning about money should be a regular family activity, rather than one defined by the parameters of specific game. Online Games Many online educational games exist for kids. Here are five examples of great online games that your children can play to learn about money, what it's worth, and how to use it wisely. You do not need to download anything to play these games:
These particular games focus on counting and making change, but there are plenty of other such games out there. Online Simulation Games Simulation (or Sim) games are those that allow you to "build" your own world, often using various forms of money to purchase needed elements. The game has a cost to build a road, a bridge, a castle, and many other necessary items for the player's in-game life. Though these types of games are not strictly speaking "money games," they do require kids (and adults) to make wise choices for today and for the future. Also, popular games like Minecraft build kids' understanding of bartering, along with the dangers inherent in carrying valuables around (you can be robbed). One added element to these games is the option of using real money to purchase fantasy items—something that has become both popular and controversial in recent years. Kids will have to weigh the benefits of fantasy goods versus the real thing. Role-Playing Games As kids get older, the types of money-related games they can play become more complex. If your kids are into role-playing, then games like Dungeons and Dragons can be a great way to introduce the idea of earning, saving, and spending—though, of course, you'll be working with gold and silver pieces rather than with dollars and cents. Sure, you could blow all your gold on that fabulous suit of armor, but then you'll have nothing left over when you need an antidote to the Evil Queen's poison arrows. In role-playing games, managing money can be a matter of life and death. Homemade Games Great games don't always have to be purchased. You can make lots of games to encourage learning with the materials around your house. Get creative by pretending to be a bank or practice making change for purchases. You can even make it an outdoor activity with your kids, by collecting and using pebbles for coins, and leaves for cash. In a Parents, Kids, and Money survey, researchers found that less than 14% of respondents received financial guidance from their parents, and only 4% of parents spoke about money with their children 4 and under. In this article, we will discuss how playing games that use coins or currency is a great way of providing financial education for kids , as well as to reinforce a number of simple mathematical concepts like addition, subtraction, multiplication, and division. You can use regular coins, or (if you're concerned about sanitation or choking) you can make your own currency out of cardboard or paper, with clearly printed values for early readers. If you decide to use real coins, make sure the children know ahead of time that they will not be allowed to keep the money; this will help keep little ones from becoming upset at the end of the game. By turning coin-counting and math exercises into fun games that the whole family can play, children can learn valuable information about money management without even realizing it. Below are several fun options. Money Toss This variation of old-fashioned penny pitching has children tossing mixed coins into a bowl. Those that stay in the bowl become part of the winner's stash, while those that land outside the bowl go to the other player. At the end of the game (you can set the time boundary based on age and level of patience), kids must count up their winnings to see who has the most. An important lesson: sometimes the largest number of coins does not add up to the greatest amount of money. Dollars and Dice This game requires dice and real or cardboard coins, and is appropriate for kids who know how to add numbers. The goal of the game is to collect the correct number of coins to create a dollar. Players take coins based on a roll of the die. The numbers on the die correlate to the coin values as follows:
Players take turns rolling the die and adding coins. The winner becomes the first player to reach exactly one dollar. If taking a coin would put the player over a dollar, the player loses the turn. Once the kids master the game, you can change the winning amount to odd amounts, like $2.17. Money Matching The difficulty of this game can be varied depending on the needs of the young players. For children who are learning to count but are not adding yet, keeping values small and just using pennies will be effective. For older children who can add, use higher values and all of the coins. Create a set of cards with different values, and give each child a starting bank of coins. For younger children, use card values up to 10 cents, and for older kids create card values up to a dollar. Players take turns drawing cards and then use the coins to create the value shown on their card. There are typically no winners in this game, but perhaps you can provide a small reward like a sticker every time a player gets the right answer. Hide and Seek You can modify this game depending on children's ages and counting levels. Parents hide coins, real or pretend, around the house. Children are then set loose to find as many coins as they can. Pennies can be used for younger children and the rest of the coins can be added in for older kids. Keep track of how many coins you hide, and when all the coins have been found, players count up their totals. The player with the highest total wins the game. Kids will immediately want to take a turn hiding the coins; just make sure you are able to find them all. Shopping Center This game works well for younger kids who are learning to count. Gather a number of toys and place price tags on them, keeping the prices countable in pennies. Have the children identify the price and count out the number of coins they need to buy the item. Make sure ahead of time that players know they aren't playing to keep the items. Mix and match the items and give kids plenty of pennies so they can figure out the best way to divide up their pennies and spend them. Poverty is a complex issue that can stem from a variety of reasons that are too difficult for young children to understand. But even though issues surrounding hunger and homelessness are complicated, it’s important to talk to kids about poverty. If you are a parent who doesn’t often worry about putting food on the table or having a warm place for your child to go to sleep, wrapping your arms around this conversation may be quite difficult. But without a clear explanation, kids may not understand why some kids get free lunch at school or why there’s a homeless person asking for money. And they may make inaccurate assumptions about people living below the poverty line. Why You Should Talk About Poverty At some point, your child will notice that some people don’t have as much money as others, and he’s likely to have some questions about it. It’s estimated that one in five children in the United States lives in poverty. Many of those children have working parents, but low wages and unstable work leave them living below the poverty line. There’s a good chance some of your child’s classmates struggle with issues like food insecurity and homelessness. You might be tempted to say to your child, “Eat your broccoli. There are starving children in other parts of the world who would love to eat that." But talking about people who live on another continent may be too far removed from your child's world for him to grasp. There are plenty of people struggling with poverty much closer to home. Talking about real-life situations in your community may help him gain a better understanding of what poverty is. Children living in poverty may experience lifelong consequences. Poverty affects families in the following ways:
Holding conversations about poverty can be an opportunity to educate your child as well as a time to foster compassion for others. When your child understands a little more about why some people live differently, he may have more empathy for people who experience poverty. Look for Opportunities to Address the Subject Rather than bring up the subject of poverty out of the blue, look for opportunities to bring it up naturally. Then, you can talk about it more concretely. When there’s a Thanksgiving food drive at school, talk to your child about why you’re donating canned goods. Or, when there’s a gift drive over the holidays, explain that some families may not have enough money to buy presents. Be Prepared for Tough Questions At some point, your child will notice that his peers or people in the community are living in poverty. Be prepared for questions such as:
When your child asks questions, it’s a sign he’s ready for more information. It's important to give him age appropriate answers. Give Simple Explanations to Elementary School Children Kids don’t understand money or economics. A commercial about child hunger may spur innocent questions to like, “Why don’t their parents go to the grocery store and buy them more food?” Between the ages of 5 and 8, kids are ready to learn simple explanations about poverty. Try saying something like, “Some people aren’t able to earn enough money to buy food or a home to live in.” At this age, you don’t need to give lengthy explanations about the factors that may prevent someone from earning a livable wage. Conversations about disabilities, substance abuse, and a poor economy can wait until the tween or teen years. Talk to Tweens and Teens About the Underlying Causes Tweens and teens have the ability to begin understanding some of the reasons why poverty exists. Teaching Teens About Money is very important also talking about the factors that contribute to poverty, such as:
Pay Attention to the Messages You Send The things you do, as well as the things you don’t do, will send your child messages about people living in poverty. For example, if you walk past a panhandler without making eye contact, your child may assume homeless people are beneath you, so it’s important to explain why you don’t give strangers on the street cash. Say something like, “I don’t give people money because I’m not sure how they’ll spend it. But I might buy them some food sometimes.” Or, explain that you donate money to programs that help homeless people have food to eat and shelter to stay in. It’s also important to avoid sending a message that implies hard work always prevents poverty. If you say things like, “I work hard so we can live in a nice house,” your child may conclude people living in poverty must be lazy. Get Your Child Involved in Helping Donating cash to a charity may not teach your child much about helping others. But, involving him first-hand in helping people in need could help him gain a better understanding of how he can address poverty. Get your child involved in donating some of his toys or unused clothing to others. Ask him to choose which items to give and talk about how it can help other children whose parents may not be able to buy toys or clothing. Bring your child with you to the store to buy food for a food drive. Ask him to pick out canned or dry goods that you could give to families who may not be able to afford food. When children see that they can take steps to make a difference, they may feel inspired to perform more acts of kindness in the future. Discuss the Safeguards You Have in Place Talking about poverty may cause your child to become a little anxious. He may worry that you will run out of food or that you might be homeless someday. So it’s important to talk about any safeguards you might have in place. If you have a friend or relative who might help you if you were down on your luck, say something like, “We could always live with Grandma if we didn’t have our own home." Or explain that there are government programs in place that help people who can't afford food. Of course, as an adult, you know that even the best safeguards are not foolproof. You may never have to confront a turn in luck that leaves your family in great need, but we all face that possibility. The best thing you can do for your kids is assure them that you’re always there to love and protect them. Remind them that regardless of where your circumstances take you, you always will. Sharing anything beyond that, especially with young children, may be too much for them to handle. It’s tough to talk about money, even when the discussion is with someone mature and rationale. When it comes to teaching your kids about finances—in particular, what’s a “want” and what’s a “need”—it can be even tougher. It’s not easy to explain to your child that the toy truck he thinks he needs, isn’t as important as the electricity you actually need to keep your home running. Saying no is an important part of teaching children that they can’t have everything that they want (even if it’s affordable). Kids need to know you will provide everything they need. Teaching them the difference between needs and wants will set them up with proper financial priorities that will benefit them later in life. Get Clear on the Difference in Your Own Mind Before you strike up conversations with kids about what is a need and what is a want, it's important to make sure you have a good handle on it in your own mind. Distinguishing between needs and wants can be a little tricky in today’s world. In fact, studies show technology has changed our definition of needs versus wants. For example, do you need a smartphone? Well, maybe your phone is necessary because it allows you to call for help in the event of an emergency. And perhaps you operate a business that requires you to have a phone so you can earn money that takes care of your basic necessities. But, on the other hand, plenty of people survive without a smartphone. For clarity’s sake, you might make all “needs” fall into the categories of food, shelter, and clothing, while a “want” is something other than that. There’s a gray area, of course—for example, Oreos are food, but they’re certainly not necessary. An RV provides shelter, but something less expensive and more practical certainly does the trick as a “need.” Designer clothing provides warmth and protection, but no one needs a $200 pair of jeans. This dichotomy is a very tricky point for kids and teens to understand. Age-appropriate explanations and exercises can help. Read Books Together When you have little ones, a picture book on the subject can start the discussion. Here are a few books that can help kids learn to distinguish between wants and needs:
Have Grocery Cart Discussions When your child reaches kindergarten, she’s likely ready to start learning a few more details about “wants” versus “needs” (if you didn’t broach it when she continually asked for the toys she saw on commercials as a toddler!) If your child regularly goes to the grocery store with you, this is a convenient exercise to do. If she can read, let her hold the grocery list and identify those items to her as needs. As you walk through the aisles and pick up items, ask your child if it’s a need or a want. If it’s on the list, it’s a need; if it’s not, it’s a want. Laundry detergent is on the list, so that’s a need. Ice cream isn’t on the list, so that’s a want. Once she’s a little older, you can talk about price points, too—that vanilla ice cream is on sale, but the rocky road ice cream looks so delicious, though it’s not on sale. What would she have to remove from the list in order to get rocky road instead of vanilla? This teaches your child how you make sacrifices (or save up money) to purchase the things you want, or how to work that special item into a budget. Create a Wants and Needs Chart If you can trust your child with scissors, you can do this discussion-provoking exercise to visualize wants versus needs. Grab a stack of magazines or advertisement flyers from the newspaper, as well as a sheet of paper. Draw a line down the center of the paper and label one side as “want” and one side as “need.” Ask your child to cut out items that fit into each category, and then talk about what he’s chosen. You can do the activity, too, to show your kids that adults have wants, too, that they can’t always purchase. Perform the Household Budget Exercise Once your child is old enough to understand the basics of adding and subtracting, you can work up a mock household budget with her and focus on money management for children. Give her a set amount of fake money—say, $800—and a list of expenses, both needs and wants. The list could include needs such as rent ($500—it’s just an exercise!), groceries ($50), gas ($20), and a car payment ($200), as well as wants such as video games ($25), cable TV ($50), a smartphone ($75), and fashionable clothes ($75). This will teach her that after the needs are met, not all the wants can be purchased without running out of money. Let Kids Pay for Their Wants Older children and teens can learn first-hand the basics about needs versus wants when you allow them to pay for their wants. Pay a weekly allowance for completed chores. Then, let your teenager buy everything she wants outside of her needs. A cute new outfit, tickets to the movies, and pizza with friends should all come out of her own budget. Of course, your child will need some guidance from you about how to save money. So before you start this project, sit down together and identify the things she’s going to want throughout the year—like a prom dress, spending money for a family vacation, and new basketball sneakers. Discuss how much she’ll need to save each week to ensure she has plenty of cash to cover those things. Then, let her decide how to spend her money on other wants. If she makes the mistake of spending all of her money the first day she earns it, don't give her anymore. Missing out on an outing with friends or not being able to make an impulse purchase will remind her to do better next time. Let her face the natural consequences and explain that it’s a want and she can live without it. And she’ll learn valuable money skills that will serve her well throughout the rest of her life. Be Willing to Say No It’s hard to deny your child everything that he wants, but giving into everything asked for won’t do him any favors. In fact, overindulging your child could lead to materialism—which studies link to reduced life satisfaction and higher rates of depression. Whether she asks for a new toy or she’s begging for a new necklace, saying no sometimes will remind her that she doesn’t need those things. When you teach your child the difference between wants and needs, she’ll be more content with what she has. And you’ll be more likely to raise a child who becomes a content, financially responsible adult. It’s never too early to start financial education for kids. Grade-school age is a perfect time for teaching kids about money since children are learning addition, subtraction, and other math concepts at school.
Parents can start promoting fiscal skills, such as saving, with younger grade-schoolers. As children get older, they can begin making some decisions about money themselves, such as deciding how to spend their allowance or helping you decide how to allocate money for a family vacation. Here are 10 smart tips parents can use to teach kids about money. 1. Play Games That Have to Do With Teaching Kids About Money Board games such as Monopoly and Life can be a fun way for kids to learn about money. Gather your whole family around your favorite game and let your grade-schooler unleash their inner mogul. 2. Take Your Child Shopping Teaching kids about money can be a part of regular household routines such as going to the grocery store. Tell your child what your budget is and make a game of buying what you need under that set amount. Clip coupons, and let your grade-schooler help you find items on sale. A 9- or 10-year-old can bring along a calculator to keep track of your purchases and figure out how much you saved. 3. Give Him an Allowance By grade-school, kids are able to do more chores and help out around the house. Whether or not you tie chores to an allowance, it's a good idea to get your grade-schooler into the habit of managing their own money. 4. Encourage Her to Save Make sure your child has a safe place to keep their money. Letting them pick out a cool piggy bank or wallet is a great start. You might want to give your child three different receptacles for their money, such as glass jars or coffee cans, to help keep it organized: one for saving, one for spending, and one for donating to a charity. From there, you can decide together how to divide up their weekly allowance between the three jars. 5. Take It to the Bank Go with your child to the bank and open up an account. This is the perfect opportunity to weave in more advanced financial concepts. Setting up a savings account, for example, gives you the chance to explain to your child that their money will "grow" in the bank as opposed to sitting in their piggy bank at home. 6. Teach Them How to Talk About Money Grade-schoolers are often curious about things like how much someone’s house costs or what their parent's salary is. However, they don't usually have a real-world concept of what that number means, and they may not always get the figures right (for example, a child might declare that their family paid $500 for their house). While you might be comfortable discussing your family's finances with your child at home, gently explain that it’s not polite to ask other people how much money they make or spend. You may also want to discourage your child from discussing your family's finances with friends or classmates. 7. Curb TV Time Kids can be subjected to an astounding number of commercials in a very short span of TV time. Adults have trouble fighting the influence, so how can you expect a 10-year-old (much less a 5-year-old) to be immune to the enticing allure of the latest toy or kid-gadget? While you can't control how much media advertising your child is exposed to when they're watching TV or surfing the web, you can put a limit on how much media time they have each day. 8. Explain Credit Cards and ATM Cards Younger grade-schoolers may think that money comes out of ATM machines or that you can simply pay for things with a credit card. Even older grade-schoolers may not fully understand what it means to use credit (that paying for things with a card can often mean paying interest). Explaining the concept of credit early and reinforcing it often will help kids mature into financially informed young adults who will be ready for the responsibility of a credit card or loan. 9. Set a Good Example As with so many things, what you do matters. Your financial behavior will set an example for your kids. For example, never lie about purchases to your spouse. It's also important to always put purchases into context and emphasize that material goods are not what make people happy. Remind your child that some of the most valuable things in life—like spending time together—are free. 10.Teach Generosity No lesson about money is complete without some discussion about charity. Help your child put money in perspective by showing them that things like the love of a family, having enough to eat, and a roof over your head are invaluable. Learning how to set goals is an important life skill for teens. Teens who have goals are less likely to wander aimlessly through life. Instead, they'll be motivated to work hard to reach their greatest potential.
Teenage goals don't necessarily have to be life-altering. Instead, a goal could be as simple as saving up enough money to purchase a prom dress or getting a B in Geometry. Working toward a goal can help your teen learn about themself. And it can help them create bigger goals for themself in the future. Goals require teens to think about what they want to accomplish. Then, in order to be successful, they have to identify the steps they need to take to reach those goals. How Parents Can Encourage Teens to Reach a Goal Children require a lot of support from grownups to help them reach their goals. They can't purchase their own musical instrument and they can't drive themselves to basketball practice. Teenagers, on the other hand, have many more skills and resources, so they should require less support from you to reach their goals, as long as they are familiar with the goal-setting process. The teenage years are a great time to teach goal-setting strategies. Regardless of whether they are successful at achieving their goal, they can learn valuable life lessons along the way. Mistakes, failure, and setbacks can be wonderful teachers. Steps for Creating a Goal-Setting Worksheet for Your Teen One of the keys to setting and reaching your goals is understanding the steps needed to achieve it. Writing it down is the best way to help your teen organize their thoughts and develop a plan. Here are the steps you can teach your teen to follow so they can set healthy goals:
The Follow-Up for Finishing Goals and Creating New Ones Each time your teen finishes a goal, talk about it. Review the steps they took to accomplish it and review how they overcame obstacles or setbacks along the way. Discuss the lessons they learned. Then, help them set new goals for themself. It's important for your teen to always have a goal that they're working toward so they can constantly challenge themself to become better. Whether they want to get healthier, become happier, or do better in school, help them identify realistic goals that will help them reach their greatest potential. |
AuthorHi! I am Tim Connolly and I am providing help to parents to bring up their children in a healthy environment. I am working in this profession from last 5 years, if you have any query regarding this please contact me. Archives
June 2021
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