A Parent's Guide to Raising Financially Literate Children

teaching Kids About Money

When to Start and What to Do

Teaching Kids about money is one of the most important lessons you can teach your children as a parent. But where do you start? And how do you ensure your kids are learning the proper habits?

Teaching children about personal finances is a crucial life skill that will benefit them for years. Starting early and being consistent can help your kids develop healthy financial habits that serve them well.

When to Start

It’s never too early to start teaching your children about personal finances. Even young children can begin to understand basic concepts like saving and spending.

Here are some age-specific guidelines to get you started:

  • Preschoolers (3-5 tears): At this age, children can begin to understand basic concepts like money and saving. You can start by teaching them about coins and bills and introducing them to a piggy bank or clear jar to save their money.
  • Elementary schoolers (6-10 years): As children age, you can introduce more complex concepts like earning money and choosing how to spend it. Consider starting a weekly allowance or encouraging them to start a small business, like dog walking or lawn care.
  • Preteens (11-13 years): Preteens are learning to make more independent financial decisions, so it’s essential to teach them about budgeting and saving for long-term goals. Consider opening a savings account or introducing them to a budgeting app.
  • Teenagers (14+ years): Teenagers are preparing to enter the workforce and make financial decisions on their own. Teach them about investing, credit, and debt, and encourage them to own their economic choices.

What to Do as a Parent

As a parent, it’s essential to model healthy financial habits and provide opportunities for your children to learn and practice. Here are some tips to get you started:

  • Lead by example: Children learn by observing, so ensure you model healthy financial habits yourself. Be open and transparent about your financial decisions and explain why you make confident choices.
  • Please encourage your children to save some of their allowance or earnings from a part-time job. Consider matching their savings or offering incentives for reaching certain milestones.
  • Teach budgeting: Teach your children to create a budget and prioritize their spending. Encourage them to make intelligent financial decisions and avoid impulse purchases.
  • Discuss financial goals: Talk to your children about their financial goals, whether saving for college or a car. Help them plan to achieve their goals and provide support and guidance.
  • Encourage entrepreneurship: Encourage your children to start a small business or side hustle to earn extra money. This will help them develop entrepreneurship, marketing, and financial management skills.

Examples and Activities

Here are some examples and activities to help you teach your children about personal finances:

  • Piggy bank challenge: Fill a piggy bank with a set amount of money and challenge your child to save a certain amount each week. When they reach their goal, they can use the money to buy something they want.
  • Budgeting game: Create a budgeting game where your child must make financial decisions and prioritize spending.
  • Savings jar: Create a savings jar and encourage your child to deposit a portion of their weekly allowance or earnings in it. When the jar is full, they can use the money to buy something they want.
  • Financial scavenger hunt: Create one where your child must find and identify different financial products, such as credit cards or bill payments.

Teaching children about personal finances is an important life skill that will benefit them for years. Starting early and being consistent can help your kids develop healthy financial habits that serve them well. You must lead by example, encourage saving and budgeting, and discuss financial goals with your children. Your kids will be well on their way to becoming financially literate and independent with patience and practice.

If your want to learn more about teaching children about personal finances, here are some additional resources:

Books: “The Total Money Makeover for Kids” by Dave Ramsey and “The Berenstain Bear’s Trouble with Money” by Stan and Jan Berenstain

Websites: The Mint, Kid’s Money, The Financial Diet

Apps: Bankaroo, Current, BusyK