April 25, 2023
Did you know that April is Financial Literacy Month? It’s a time dedicated to raising awareness about the importance of wise money management. Being smart about handling finances is more important than ever, as families experience higher prices, from groceries to gasoline.
During work hours at the Arizona State Capitol, people address me as “Madam Treasurer,” but when I am at home, my young children call me “Mom.” In both roles, I encourage the message of being smart about managing money and believe it’s essential that parents teach this vital life skill early on, especially when it comes to savings.
Reports indicate a child’s saving and spending habits are established at an early age, even as early as preschool. Here are five practical tips to help you teach your children different concepts about money management and the life skill of saving their money.
- Walk the talk. Talk about what you are saving for and what sacrifices you make for vacations, their college, and retirement, then demonstrate examples with them. Take them with you to the bank when you make a deposit or show them how you do it on your phone or laptop for online banking. You can also save for something together as a family and show them how you set aside money.
- Earn it. I am a big proponent of encouraging children to earn their own money, from doing chores to paying a child to complete a project. Children may enjoy pet sitting or yard work like lawn mowing or helping with household tasks. When children start earning their own money, they can appreciate and be good stewards of those funds.
- Match it. Reward your child’s good saving habits by matching their savings and encouraging them to delay gratification by saving for something they really want, which could take months. This teaches them the basic skills of compound interest, growing money with savings, and the concepts of long-term investing.
- Make it fun. Conversations with children about money should be fun, light, and not intimidating. Create an activity that can be hands-on, like crafts or a game. For instance, go to a pottery painting shop to help them paint their own piggy bank. If your child likes video games, look online for free financial literacy games. There are tons of different free games for kids that will keep them engaged while having fun!
- Jumpstart college and career savings. Give children a boost by saving for their future education by setting up a 529 plan. Have open conversations with them about their dream jobs and the money they will need to achieve their dreams.
Make the most of Financial Literacy Month
In honor of Financial Literacy Month, I encourage every parent to do their best to help children develop a good understanding of money management. It is also the perfect time for adults to examine their own personal financial resiliency. How can we better manage our money? Are we financially prepared for future, unexpected emergencies? Financial literacy strengthens not only individuals and families, but also the overall economic health of our communities.
About the Author
Kimberly Yee is the State Treasurer of Arizona and Administrator of the AZ529 Education Savings Plan. She also serves on the CSPN Executive Board. Under her leadership, 26,719 new AZ529 accounts have been opened in the last 29 months, with assets up 13.3% to $1.84 billion. For more information about AZ529, visit www.az529.gov.