If you don’t remember learning in school about budgeting or how credit works, there’s a good reason for that: You probably didn’t. While more states are integrating personal finance standards into the curriculum, last year’s Survey of the States by the Council for Economic Education found that only 17 require a personal finance course to graduate from high school.
That means the majority of students are entering adulthood with little to no knowledge of financial basics, unless they get it from one other important source: their parents. Raising kids who are in the know when it comes to money can start with a few of these tips.
Implement an Either/or Mentality
Keeping spending in check as an adult is easier once you’ve mastered the art of making intentional choices. In other words, if you want a bigger house, you might have to curb your monthly restaurant spending. This either/or mentality can be implemented early.
Dee Thibodeau, who has an 8-year-old daughter, explained, “Money is a big topic in our home – about what we budget for and what we can exchange if something comes up. She chose Disneyland passes this year over a big family vacation. So as a family we took a vote and agreed.”
Melissa Angert, a mother of three, helps her kids learn the art of saving and spending intentionally by having them pay for things like movies, art supplies, concerts and going out with their friends.
Involve Everyone in Saving for Family Activities
Family activities can be expensive, but that’s not the easiest concept to grasp for kids who haven’t started earning a paycheck. Instead of making the expense of these activities seem limiting, turn it into a way to make a proactive decision about how extra money will be spent, and then work to save it together.
After her daughter set her sights on a trip to Europe, Thibodeau helped her decide on a goal date of her 10th birthday, and then they went to work collecting extra money in an empty kitchen jar.
While small efforts might not fully cover big expenditures, it does create a sense of the time and work that goes into paying for what you want.
Find Fun Resources and Games
Financial topics don’t have to be dry and boring. In fact, there are plenty of resources that can help turn this complicated subject matter into something engaging and fun.
Ashley Cline, a mother of two, uses the storytelling in Dave Ramsey’s Adventure Pack to impart important financial knowledge.
The Allowance Game, a tool Thibodeau uses, helps younger kids understand how to handle money and work on simple addition and subtraction of coins and bills.
If you’re looking for something more advanced for tweens and teens, PracticalMoneySkills.com has plenty of free online games to strengthen and test financial knowledge.
Make It Visual
In an article for The New York Times, writer Ron Lieber shared how one father decided to show his six kids how far his paycheck stretches each month by laying out nearly $10,000 in cash on the dining room table. From there, he made separate piles to show what must be paid – everything from the mortgage to fees for after-school activities.
While you might not be comfortable taking it that far, explaining money concepts like budgeting can help with a little visual representation. For instance, Klein uses the Moonjar piggy bank so her kids can see their funds separated between spending, saving and sharing.
Take Advantage of Everyday Experiences
Sometimes the most helpful lessons can be pulled from the things we do in our everyday lives. This could include bringing kids on a trip to the bank and explaining how to fill out a deposit slip, breaking down the concept of debt when you’re in the process of paying bills, or using a trip to the grocery store to talk about curbing impulse purchases and sticking to a budget.
If you need help determining which lessons are age-appropriate for your kids, the President’s Advisory Council on Financial Capability has a financial infographic to help.
Do you have any tips for including your kids in financial conversations? We’d love to hear them!
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