Teach Children About Money

It’s our responsibility as parents to teach our children financial literacy.

When taking the opportunity to teach your child financial literacy, here are some areas to focus your discussion.

1. Basic Money Concepts: Start with fundamental concepts like the value of money, different denominations of currency, and understanding what money can buy.
2. Saving and Spending: Teach children about the importance of saving money for both short-term and long-term goals, as well as how to make thoughtful spending decisions.
3. Budgeting: Introduce the concept of budgeting by explaining how to allocate money for different purposes, such as saving, spending, and giving.
4. Earning Money: Discuss different ways children can earn money, whether through allowances, doing chores, or starting small businesses like a lemonade stand or dog walking service.
5. Needs vs. Wants: Help children differentiate between needs (essential items) and wants (non-essential items) to encourage responsible spending habits.
6. Setting Financial Goals: Teach children how to set achievable financial goals, whether it’s saving up for a new toy or setting aside money for a future college education.
7. Delayed Gratification: Discuss the concept of delayed gratification – waiting and saving for something they want, rather than making impulsive purchases.
8. Banking Basics: Introduce children to the concept of banks, savings accounts, and the importance of keeping money safe.
9. Interest and Compound Interest: Explain the concept of interest and how it works, along with the benefits of compound interest in savings accounts.
10. Introduction to Investing: Introduce the idea of investing by discussing stocks, bonds, and other investment options in an age-appropriate way.
11. Understanding Credit: As children get older, discuss the concept of credit, loans, and borrowing money responsibly.
12. Identity Theft and Online Security: Teach children about the importance of keeping personal and financial information safe online to prevent identity theft.
13. Comparison Shopping: Show children how to compare prices and features before making a purchase, whether it’s a toy or a larger item.
14. Charitable Giving: Discuss the importance of giving back and helping those in need by making donations to charitable organizations.
15. Real-Life Money Scenarios: Present children with real-life money scenarios and ask them to make decisions about saving, spending, and budgeting.
16. Career and Income: As children get older, talk about different careers and how they relate to income, expenses, and financial choices.
17. Taxes: Introduce the concept of taxes and how they fund public services like schools, parks, and roads.
18. Creating a Mini Economy: Consider setting up a mini economy at home where children earn and spend play money to practice real-life financial scenarios.
19. Family Budgeting Exercise: Involve children in a family budgeting exercise to help them understand the costs associated with daily living.
20. Life Skills: Connect financial literacy with broader life skills like critical thinking, problem-solving, and planning for the future.

Want to know a little more on each topic download our free Parents Guide to Teaching financial Literacy.