Kids Want to Learn Money Skills from Parents

12 04 2011

In a recent 2011 Teens and Money study, 92% of kids want to learn about money management from their parents.  The recent recession has motivated these children to learn how to manage money.  However, less than half report discussing money management with their family, according to survey findings.

Being that financial literacy is not often taught in schools, parents are left being the ultimate teachers of personal finance to their children.  The good news:  children are eager to learn from their parents.  Learning money management at an early age is crucial.  81% of teen respondents said the best time to learn money management was during their school years, grades K-12.

What are the ways we, as parents, can teach our children money management skills?  

  • Discuss the family’s expenses.  Discuss various expenses the family has as a whole.  Whether that be a gym membership, cable television plan, newspaper delivery, youth activities.  Explain how the expenses fit into the family budget.  Your children might just choose to cancel certain expenses in order to help the family save money!
  • Play a Game.  Teach kids to understand what it means to live on a salary and pay expenses.  Grab index cards and write down a monthly income and various monthly expenses.  Let them decide which expenses will be cut in order to balance their budget.
  • Take Them Food Shopping.  What a great way to improve math skills and grasp the understanding of just how much food costs.  Show them coupons and explain how they save money off the total bill.  Explain how the Commissary saves the average family 30% off their total bill because prices are based on the National Average.
  • Visit the Credit Union.  Have an associate discuss with the children the meaning of interest rates and fees.  Visit other banks to seek competitive interest rates.
  • Discuss Military Pay and Benefits.  Help the kids to understand military benefits such as health and life insurance.  Link the benefits to that of money because even though the benefits are not actual money received, they can be thought of as money that is not being spent.
  • Pay Them.  At the young age of five, children will understand what it means to work – with the end result being getting paid.  Parents can start off with small household tasks like taking out the garbage, filling and emptying the dishwasher, making their beds, putting toys away.  When the tasks aren’t completed, they do not receive pay.
  • Mall Time.  The mall is a great place to visit because of the mass of stores available.  Show the children prices of clothing, cell phone plans, etc.  Discuss with them store credit cards and the hefty interest rates charged to consumers when bills are not paid in full. 
  • Car Dealerships.  The third most expensive monthly expense faced by American families is the car payment.  On average families spend $400 per month paying for a car.  For the teens in your life, see if the car dealership would discuss the pros of paying cash for a used car versus financing a new one.
  • Browse Real Estate Ads.  Point out the various prices for housing.  Discuss renting versus owning, how prices are based on location, foreclosures versus buying new properties.  Military families should discuss the benefits of the VA Loan and various programs available for first-time homebuyers.  Also, the benefits of living on base versus off base.

Teaching money management to our children will shape their financial future as long as we decide, as parents, to each teach them financial principles.  Wealth building begins at a young age and the power we have as parents to guide our children along the path of financial success is truly priceless.

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