Recently after asking what I do for a living a 4th grader told me if he had a million dollars, he would buy a limousine full of candy. The comment, although amusing, prompted me to think about how kids learn about money at school and inspired this month’s newsletter topic.
The financial acumen we adopt as children can have a significant impact on our financial decision making as adults. If you have a child, grandchild, niece, or nephew in your life here are some tips to make money conversations easier:
1. Start early – Our money values are formed at a very young age. Giving a child an allowance and encouraging them to save for something they want is a great way to adopt good habits early on.
2. Be honest and keep it positive-Honesty about what is affordable will help children understand the importance of budgeting and saving money. Negative framing of your financial circumstances is generally unproductive and may lead to anxiety around money.
3. Make it fun - Incorporate games and activities into your conversations about money. This will make learning about money more engaging and enjoyable.
4. Set a good example - Children learn by example, so it is essential to model good financial habits. Show them how you budget, save, and invest money.
5. Be patient - Learning about money is a process, and it takes time for children to understand and apply financial concepts. Be patient and encourage them to ask questions and learn at their own pace.
6. Teach them about credit - Teach the child about the importance of good credit and how it affects their ability to get a loan or a credit card.
7. Encourage giving - Encourage the child to donate a portion of their allowance or earnings to a charity of their choice. The feeling of giving is a great financial motivator.
8. Lastly, encourage the child to think independently about their money decisions. Help them avoid comparing to peers.
Teaching kids about money is a critical part of their financial education that they may not get elsewhere. By starting early you can help a child develop healthy financial habits that will benefit them for the rest of their lives. Ask us about savings accounts for kids and good learning tools to help in the process!