Why the Money Talk is Important
Despite financial education being one of the most important lessons to shape our adult lives, it’s not something many people learn until later in life. As a parent, you have many “talks” with your children, but too often the “Money Talk” isn’t one that happens until it’s too late. “Financial literacy” is an easy term to define, but a more difficult one to put into practice. Here are some tips to help you equip your children with a bright financial future.
Set an example.
Children who consistently see their parents pay the bills on time and keep a budget are more likely to adopt those practices in their own lives. Parents who have made financial mistakes should also share the experience with their children. That knowledge can prepare kids to avoid the same mistakes with their money in the future.
Encourage younger kids to collect spare change in a clear jar or container so they can see their savings grow. Each time the kids want a small treat, parents can offer to put the money they would have used to buy the treat into the “savings jar” instead. Once the jar is full, children can count the money and use the funds to purchase an extra-special treat. That way, they’ll associate a sense of excitement with savings – they’ll understand that delaying gratification can lead to a greater payoff down the road.
Have kids learn with their own money.
Kids will learn the value of a dollar better if it’s their own. Younger children who are paid a small allowance for chores they complete around the house will learn the concept of working for money. Kids can then begin to spend their own money on some of the things they want. They’ll begin to appreciate what these items actually cost
and will be more open to lessons about price comparison.
Parents can make a trip to their financial institution an exciting event for younger kids. Let them in on the process – maybe even let them press buttons on the ATM or help to fill out a deposit slip. They’ll feel included in adult chores and won’t feel intimidated by banking later in life.
There are plenty of resources out there for parents feeling mystified about their children’s financial education. Free credit union-funded resources and tools are available at MoneyandStuff.info and bizkids.com. Many credit unions also offer programs geared toward fostering financial literacy in kids and teens.
Learn how Day Air Credit Union can make your financial dreams a reality by visiting dayair.org!