While the particulars of family finance practices may vary, one thing remains the same: kids need to learn how to manage money from a young age. And yet amazingly, many teenagers will graduate high school this year with no knowledge of budgeting, loans, credit, taxes, or managing bank accounts.
Because of this, the responsibility for teaching money management falls to the parents. And April is Financial Literacy Month, so there’s no better time to start than now! Here are three tips to help you kick things off.
Children need to learn good spending habits, and one of the best ways to do that is by practicing with their own money. There are many ways to set up an allowance system; many parents create a chore-based system where the kids have to work to earn cash.
Whatever system you choose to go with, BusyKid helps to create a real life situation by giving kids a choice when they’re deciding how to spend their money. As adults, we’re familiar with this conundrum…and it’s called budgeting! Kids have four spending options in the BusyKid system:
No matter your child’s age, there are financial terms they can learn. Here are a few vocabulary examples, broken down by the age at which they are generally able to start understanding each concept.
Teach your kids about common financial pitfalls, like debt or impulsive buying. Start the money discussions when your children are young and build on them as they grow and are capable of understanding more complex concepts and nuances. Look for teachable moments. If you’re at the store and you use a credit card for your purchase, take that opportunity to explain what credit is and how it works. When you make it a regular part of their lives, financial literacy for kids comes more naturally and easily than you’d expect.
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