This Financial Literacy Month, prioritize starting to teach your kids about money. Sounds intimidating? It shouldn’t be! You don’t need to be a certified financial expert, or even be making perfect financial decisions every day.
Talking to your kids about money is about applying big picture concepts to day-to-day, real-world decisions. Start with small steps, introducing key concepts one at a time. If you’ve made money mistakes in the past—like having more debt than you planned for—you don’t need to disclose them in order to be a good money teacher to your kids. In fact, it’s a good idea to be slow and deliberate with money lessons. There is no need to dump every money fact you know all in the same day. Kids can pick up on basic financial concepts from as young as 4 or 5 years old. And, by starting while your kid is still young, you’re giving them a gift of a lifetime.
Teach age-appropriate concepts.
Four year old children might not grasp the in’s and out’s of investing, but middle-school aged kids are probably ready. That being said, even complex or intense topics can be broken down into child-sized lessons—even potentially “scary” things like debt.
Make it about exploration and discovery.
Unlike school, at-home learning that includes real-world money and personal finance can mean giving your kids space to experience money lessons firsthand. Instead of the typical school dynamic—kids listening to teachers—try asking them questions they can reflect on. Think about “lessons” as conversations instead, and involve them in your own decision-making. That will make them feel like part of the team, coming up with solutions and plans instead of getting bored hearing about concepts and theory.
Keep it fun!
There’s a common cultural trope that money is boring: adults loathe tax season, budgeting spreadsheets are the brunt of jokes, and credit card debt is a drag. But, it doesn’t have to be that way. And, for kids who don’t know any better, you’re starting with a clean slate. So why not make financial literacy fun? Come at these conversations and lessons from the perspective that what you’re teaching is interesting, important, impactful (in real-world ways), and fun. That way, your child will be on track toward healthy money habits for the rest of their life.
Use resources like books and games (both physical and digital).
What better way to prove that learning about money can be fun than playing actual games and reading stories? Whether it’s a card-, board-, or online game, making use of the available resources. Also use experiential learning-based activities and engaging books to impart important financial lessons to your kids.
Always keep money real.
This means not only relating money lessons to real life by using concrete examples, but also more simpler things. For example, teach kids to save and budget with cash, instead of apps, credit cards, or online bank accounts. Seeing coins and bills fill up a transparent piggy bank is a whole lot more powerful of a lesson than seeing a number on a screen. Make sure your kids know how much items actually cost, so they can have a better grasp of how far the dollar amount they’re saving or spending can go. (This one’s especially key when kids are younger, ages 4 to 8.)
Teaching kids about “value” is essential.
Just like giving kids an idea of the actual costs of day-to-day expenses and special treats, the question of value vs worth is crucial to bring up from a young age. Spending and saving money isn’t just about dollar amounts, after all. It is also about making decisions and planning ahead for what is important to you, what will add value to your life, and putting your dollars where your priorities are.
Talk your kids through your own money decisions on a day-to-day basis.
In a way, your whole life is a case study in money lessons. When going to the grocery store, saving up for a new car, and even deciding when to use cash versus credit cards. These are all choices your own kids will have to make when they grow up. But, there’s no reason to hide the behind-the-scenes process from them at a young age.
Make a conscious effort to think out loud next time these conversations come up. If you find yourself considering something extra special at the store, explain the difference between a “need” and a “want,” and how to know when it’s okay to treat yourself. If your kids are sitting at the kitchen table when you pull up your monthly budget, walk through it with them. Then, start a conversation about where money gets spent each month. Bring these discussions into your day-to-day and encourage your kids to ask questions.
Teaching kids about money should be an enjoyable, impactful experience. But, it is also a bonding opportunity for both of you, a way to connect over something that will only become more significant in your child’s life. These aren’t lessons you can teach in a single day. Take it one day at a time—just make sure to start today!