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Financial Literacy for Kids: How to raise money-savvy children
Here are some tips on how to raise kids who are confident and capable of handling their finances down the road.
You can teach kids about financial topics through interactive play, books, songs, and games (our Banker Jr. app being a great example). Parents can also encourage their kids to learn about earning and spending by involving them in real-life money situations.
- Assign chores, and associate a monetary reward with completing them.
- Encourage them to start a small business (i.e., a lemonade stand if they’re younger) or get a part-time job if you have a teen.
- Allowing children to watch you do day-to-day activities like grocery shopping, paying bills, and shopping.
- Allowing children to watch their parents create and maintain a budget.
- Giving the kids an allowance and letting them pay for their own “wants.”
For younger children (ages 2-12), I would suggest using books, games, and even apps to help them learn about money management in a fun, engaging way. Our app, Banker Jr., is an app that teaches children good money habits in a way they can relate to. Kids will learn to set financial goals, play games, learn good money management lessons, and more! It’s a great tool to help introduce your younger child to financial topics that could lay the foundation for a successful financial future.
In my experience, saving money, spending money, and wanting money, are the most straightforward topics for kids to understand. At an early age, we understand what it means to want and need something. Kids know that they want toys and usually understand that they need food, water, and shelter to survive. I have found that kids early on typically understand the basic concept of saving money and that it is the opposite of spending money.
Take this one step further and show them the significance of saving for something they want using real-time wants, like a toy they always ask for. Showing them how to save for something bigger and then allowing them to get it once they save enough to buy it can be a great lesson in delayed gratification, saving, and working toward a desired goal or outcome.
It’s essential to be positive.
I recommend not having discouraging money conversations around kids because you don’t want them to be afraid of the topic. You can include your kids when working on your household budget without talking about “not” having money in a negative way. It’s essential for children to think of money as a tool to help them get what and where they want to be, not something that limits their ability to do those things.
Talk to your bank or credit union.
Each financial institution is different. Resources that banks and credit unions generally offer are free community events that focus on teaching financial literacy, youth savings clubs, apps or products that teach kids about money, rewards programs, etc.
I’d encourage you to talk to your bank or credit union and see what resources they provide to help get kids involved in money management, saving, and other topics around money!
You have the power to set your children up for success.
Teaching young people financial literacy is essential because it teaches kids how to be financially responsible, equips them with necessary skill sets, and empowers them to control their finances in the future. Their financial mindset and habits will carry over into adulthood.
Raquel Hart is one of the Client Success Managers at Plinqit. Raquel believes that becoming financially educated, especially at a young age, is not just important but essential for financial success. She enjoys working with and creating content for her clients, strengthening her professional and personal relationships, and serving as a resource to those around her. In her free time, you can find her hanging out with her son, reading, or listening to music, or overindulging in the newest binge-worthy drama!