5 Tips for Raising Financially Literate Kids

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We often share personal information with our children to prepare them for adulthood. But, like sex or other tough topics, we often gloss over or avoid the topic of money. Depending on your background, talking about money with your kids can be scary and uncomfortable. Some parents worry about their lack of knowledge or fear sharing the wrong information, so they don’t share anything at all.

Unfortunately, few schools include money management in their curriculum, which makes it even more important to teach the basics at home. I’m here to help! 

5 simple tips for raising financially literate kids. 

child putting coin in jar that says "saving" -tips for raising financially literate kids Let Kids Experiment

One way to help kids learn about money is to give them a chance to make mistakes on their own. A small allowance each week is the perfect incentive for children to learn how to budget and prioritize. Do they want to spend this week’s money on candy and a cheap toy? Or will they save up a few weeks to get something they really want? Better to learn and make mistakes with $10 than $10,000.

Include Children in Household Budgeting

Try including an older child in budget planning for one month (or maybe for an upcoming holiday or birthday shopping trip). Kids learn quickly when they have to stay home because they spent the entertainment funds too early in the month. Try setting a grocery budget for an upcoming shopping trip, make your week’s list, and then take your child to the grocery store with you. As you place items in your cart, have your child add up the cost of each item until you hit your limit.

Game-ify It

Turn budgeting and saving money into a game. Give your shopping lists to your younger kids and let them search online or in the newspaper for coupons and sales. Maybe promise to put a percentage of the money they save into a bank account for them to purchase something special down the road. 

Make Them Earn It

Knowing how to save, invest, and spend money is important, but one of the best things you can do for your children is to instill a good work ethic in them by letting them earn money on their own. Whether your teen works part-time, or you help your little ones start a lemonade stand, passing on the willingness to work hard is priceless.

Make Them Save for It

Rather than buying them something they really want to buy or paying for a desired experience, encourage your child to save their own money for the purchase. It will likely take them longer to get the item or to enjoy the experience, but the time that passes will teach them valuable lessons about delayed gratification and they will never forget the feeling when they finally have enough saved to accomplish their goal.

These tips for raising financially literate kids are just a few out of many out there. No matter where you begin, passing financial literacy skills onto your children is an important part of their preparation for adulthood.   

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An upstate, NY native (Fayetteville to be exact), I settled on the NH Seacoast in 2011 after living in Portland, ME, Boston, Lake Tahoe, CA and Burlington, VT. I’m a lawyer-turned-financial planner at Charter Oak Capital Management who loves helping singles (by choice, widowed, or divorced) and couples organize their financial lives and plan for the life they imagine. My husband Dan is co-founder of a renewable energy company and we have three girls ages 9, 7 and 2. Our family loves the outdoors and spends a lot of time in Rangeley, Maine -- hiking, skiing and biking. I’m an avid reader, podcast listener, home organizer and gardener. I love all kinds of music and smart comedy (a la Midge Maisel). And in the event I find spare time, I beeline to my hammock or the couch with a book.

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