You taught your kids to walk, talk and ride a bike. You taught them to share, to brush their teeth and to eat their vegetables—but do they know how much their veggies cost, and what that means? Teaching children to be financially savvy and responsible with money is an important lesson that can often be overlooked. However, establishing frugal habits early on is a major aspect of parenting—one that will position them on the path to a more stable and successful future.
If this feels like an overwhelming task, don’t be discouraged—you are not alone in the parental balancing act. This Financial Literacy Month, take a breath, and take financial responsibility lessons off the back burner; simply identify a few main goals, and you’ll find it isn’t quite the daunting task you pictured. In fact, the more you look around, the more you’ll find that teaching opportunities can be easily woven into your everyday life.
Here are a few simple tips to get you started:
- For young children, involve them at the supermarket when selecting items and making purchases, so they can see how the exchange of money works.
- Take this activity a step further when they are a bit older, by allowing them to select an item they want, comparing prices, and even helping them clip their own coupons.
- If possible, provide a weekly or monthly allowance of a small sum. Once your child begins to accumulate money, you can offer more guidance on how they can spend and save.
- Emphasize saving for the future and use a physical representation like a jar or a piggy bank. Clearly explain why saving for short-term and long-term expenses, like for a new toy or even for college down the road, is important.
- Show your children how you save as an adult and explain why you do it. From saving to paying off your mortgage to making contributions to their 529 account, they will appreciate knowing how far their funds can go.
- Illustrate how learning about money can be fun! Incorporate board games, like Monopoly or LIFE, into your family time. Games like these teach valuable lessons from managing funds and resources, to making room for spending and investing.
Financial literacy is an asset that will benefit every child, both in the present and in the future. Arming your children with these skills will help them to become fiscally responsible adults, equipping them with the knowledge to save and spend wisely in the years to come.
About the author:
Deborah Goodkin is the Program Manager of NEST 529 College Savings Plans, First National Bank of Omaha.