Help your kids make “sense” out of their dollars with these financial literacy tips from Joanne Wong, vice president of marketing for Virtual Piggy, a website that teaches youth about money matters.
Just say “know”
Wong is a strong believer in talking to kids about money. “It’s an important life skill that needs to be learned through ongoing conversations and experiences,” she said.
In fact, the earlier you can start introducing kids to the concept of money, the better. For young children, parents can show how money is used in everyday life when buying groceries, clothing and more. As kids get older, the conversations can become more advanced, with discussions about budgeting, identifying wants versus needs, and the importance of saving.
“For many families there’s a misconception that talking about money is taboo,” Wong said. “The truth is, money is a topic that should be discussed more frequently to ensure kids get comfortable managing their own money and making good choices.”
Another great way to help children learn financial responsibility is through real-life experience. This can range from playing “store,” to opening a lemonade stand or hosting a garage sale. At my house, we often turn family game night into “financial awareness night” by playing board games that incorporate money into gameplay such as Monopoly, The Game of Life and Payday.
Another fun activity can take place at your local farmers’ market. Give each child a set amount of money, for example $2. The object is to have the kids buy whatever they like with their money, as long as it does not go over the $2 limit. Eventually everyone meets up and the kids compare their goods, which often leads to a conversation about the value of money.
Model money management skills
According to a survey conducted by Junior Achievement, 86% of teens learn their money management skills from their parents, which is why Wong believes modeling good money sense is of primary importance.
One way to help kids learn good financial habits is to include them (when appropriate) in your decision-making skills. For example, you can explain how you “price shop” at the grocery store or set aside money for your retirement.
A “family savings jar” is another great way to model financial responsibility. First, meet together as a family and decide on a financial goal and what you will do with the money once the goal is achieved. Then have family members contribute a certain amount to the jar each week. Kids can also help by counting the money each week and charting the family’s progress. Eventually your family will end up with a nice nest egg and a meaningful lesson on money management.