Financial Literacy

700 Words2 Pages

No one comes into this world with financial literacy skills. They must learn them. Once upon a time ago, kids could learn these crucial skills by taking a class in junior high or high school. However, nowadays, it seems like common sense classes like “money management” just don’t get offered in school like they used to. But kids don’t need to learn personal finance in school: Parents can help their kids gain financial literacy. Here are three keys to keep in mind as you teach your kids financial literacy.

1. Teach Them to Earn Money

The Busy Kid website suggests that parents teach kids about financial literacy by doing activities that simulate situations they’ll face in real life. One simple way to do this is to encourage kids to earn their …show more content…

For example, while everyone needs food, it isn’t critical to go out to a restaurant every night to get it. The same can be said for buying designer clothes versus a less expensive brand. Learning the difference between these types of needs means that kids can save more of the money they earn in the long run.

3. Learning to Budget

When kids learn to budget, they learn the value of their money. This actually may be where your “financial literacy for kids” lessons should start. It’s one thing for kids to earn money. It’s another thing for them to learn how to use it wisely.

For example, your kids may want a game or a toy that they saw on TV. But right now, they might also want to go out with their friends for pizza. They need to know that the money they spend today will not be there tomorrow. In other words, they can go ahead and have a night out with friends, but they should also know that by spending their money in that way, they’ll have less money for the toy they want.

This is the reality of budgeting. As adults, they’ll be constantly asked to make decisions about where their money goes. If they don’t learn how to make these decisions, how to budget, early on in life, they’ll probably make unwise financial decisions as adults. Budgeting teaches kids to tell their money where to go.

Final Thoughts on Teaching Kids Financial

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