Behind the Business / Culture

Passing it forward: teaching our children financial literacy

As a parent, tackling finances and trying to make ends meet are a challenge. There are a lot of circumstances that occur on a whim that forces you to cough out a pretty penny just to fix. While trying to juggle medical bills and the rent there isn’t much left to go around. Naturally, as a parent I want my children healthy, happy, educated and financially secure. I am among thousands of parents that find it challenging to find time and interactive ways to engage children in learning about finance. Usually, the school systems doesn’t give the option for financial classes until college.

So what to do? Let’s face it Finance isn’t exciting when comparing it to ‘PJ Masks’, ‘Doc Mc Stuffins’ or ‘We Bear Bears,’ but you can try to make teaching and learning about finance easier and more fun for the family.

I found these ideas online that can be used daily, give these a try to see if they will work for your family:

1. Lead by example. Save, spend intelligently, keep score by budgeting and plan for the long-term. Your child watches what you do.  Explain to your children how and why you are doing these things.  Simplify how you explain things to them. You’ll be surprised how they quickly understand.

2. Chores for pay. Give them an allowance and make it clear that no results means no pay. Consider extra bonus incentives, e.g completing chores before a certain day or completing tasks outside of their normal chore list. Showing them that being proactive reaps rewards for other perks that include an extra 50c or a dollar in their allowance.

3. Reprimand unwanted behavior. Penalties are habit-forming for kids, just as they are for adults. Everyone says it takes 21 days to form a habit. Use an example of their bad habit. A dollar is taken off for interrupting or back talk.

4. Teach them entrepreneurship. Children love getting roles that have their name on them. Assign something that they like to do and make it their own. Give them the responsibility of seeing their task through. Work together with them to make short-term and long-term goals. A short-term goal could be accumulating enough funds for a certain toy or an ice cream treat. A long-term goal could be a ticket to an amusement park or even a toy car.

5. Watch how your child responds to the financial tutoring differently. Your child will show you what pace you have to take for them to fully grasp everything. Open communication with them is important. An information overload, with jargon they do not understand will make them frustrated and irritable. Follow their ques.

6. Teach them on bargain shopping. Visit their favorite place. An example could be Toys r us. Take the same toy in different brands and let them compare each toy against each other. Make them aware of their budget and what can fit in their budget. Let them make the final decision even if you may not be happy with their choice.

Source: http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2015/03/12/10-ways-to-teach-your-kids-about-finance

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