Teaching Your Kids About Financial Literacy

Kids grow up with an understanding of money based on what you show them. How do you pay your bills? Your child probably knows when certain bills stress you out. One study even found that parents were more at ease discussing drug use than financial issues. How can this be?

Teaching Your Kids About Financial Literacy

One reason is that many adults do not believe they manage their money very well. However, this is one topic you do not want to miss with your children. What if you could teach your kid some of the tricks of the trade so that they become a money genius? Here are some down-to-earth and clever ways to talk to your kids about how much money matters.

Teach Kids to Save With a Piggy Jar

Kids are impressionable. You can teach younger ones how to save the change and grow their money little by little. One concept is called “Pay It Forward,” and it involves talking to your child about charitable giving. You can show your kids how just a few dollars can help a cause or someone else in need. You then announce a matching offer. For every cent or dollar saved, you will match it in the piggy jar.

Perhaps your child has a special interest in animals or maybe there’s someone you know suffering from a certain chronic illness. You can find charities that get your child interested in saving money and donating to a cause.

Show Kids What Things Cost

Money comes from hard work, and when it’s gone, it’s gone. Teaching kids that buying anything means giving money is an important step for them to understand the value of goods and what you earn. To teach younger kids the value of delayed gratification, butterfly kits are a fun option. They learn about tending to something and helping it grow while patiently waiting for the surprise. You can also open up a shop with pretend money and play with your children to help them learn about supply and demand.

Older children should learn by going out and helping you pick up things from the market or paying for tickets at a cinema. By actively learning what it costs for cereal or to grab a taco on Tuesday, you show your kids how to budget and take responsibility as they get older.

Give Your Teen a Bank Account

While you do have to be at least 18 years old to open most accounts, you can always open up an account for your child as savings account or invest in and The Children's ISA under your name or a joint account if they are older. Bank accounts for kids are a common way now for older kids to learn about the cost of what they want, statements, balances, withdrawals, and how to use online banking tools.

Should You Start an Allowance?

There are actually apps to help keep track of your children's allowance and pay them small amounts when they help you with a job. For example, you can use Rooster or iAllowance. Perhaps your kids can earn extra money by taking care of additional chores that no one ever gets around to or by tutoring a younger sibling in a subject.

For parents who need financial help, there is something else you can do in case of an emergency.

If a sudden emergency pops up, and you are faced with unexpected medical bills or emergency home repairs, applying for online loans could be an option for you. An online loan can be considered if you are faced with expenses from an unexpected emergency scenario, but do not have the funds in savings or on hand to cover it.

Wrapping Up: Teaching Kids to Spend Wisely

Kids need to learn about money and responsibility slowly, gradually building up their knowledge of money. Experts suggest that tools like GoHenry and Santander Mini 123 help children understand the concept of banking, electronic money, tracking their spending, and budgeting.