WATCH LIVE

Finance Is Fun: Financially Savvy Kids 

Marion Syversen has been spending the month of April talking about financial literacy on Finance Is Fun.

Anytime I felt intimidated about lessons I could – or didn’t feel capable- of teaching my kids, I would use material aimed at their age group and would then learn good thinks for me, too.

So you don’t have to be a genius to teach kids valuable lessons about money.

1.) Money has value – I have seen a child threw out pennies because ‘they aren’t worth anything.’ This was a bigger kid who didn’t seem to realize that they may a SMALL value, but when you put a bunch of them together, they have a LOT of value. Teach your kids by comparing what they can get for $5, or $50, and help them see the value of money.
2.) Once spent, it’s gone- You only get one chance with THIS particular $5. Once it’s gone you need to earn the next $5. You worked hard for that money. Is what you are getting in return as valuable to you? That answer will differ from person to person. What is important to one may seem silly to another. So don’t judge what they think if it’s their money. Just help them understand once it’s spent, that’s it.
3.) Needs vs. wants- This is a deeper conversation because for most kids they mostly use their money for wants. So you will need to help them into the ‘real world’ of money going to needs and THEN wants. You can help them have skin in this game by allowing them more control of their budgets for school clothes shopping, for planning for summer- be it summer programs for childcare or camp. Let them know either the actual cost- depending on their ages- or a simulated cost illustrating that you can buy 7 weeks of childcare if you go HERE, or 4 weeks if you go THERE. And seeing if they have ideas or items they might be willing to sacrifice or money to contribute to the place they’d rather attend.
4.) Allowances- pros and cons on chores for allowances tied to chores. I can’t pay someone who doesn’t do anything. I have friends who put dollars on a bulletin board next to the description of the jobs they wanted accomplished. Kids vacuumed, they took the money. You have to figure out what works for you, understanding that kids – and even spouses- may not complete a task like you do it.

You teach about money every day now by the words you say about budgets and bills and daily interactions about money. Now you can do it with more focus.

Citations:
http://www.forbes.com/sites/jennagoudreau/2012/09/04/how-to-raise-financially-savvy-kids-teach-money-skills/