It’s never too soon to teach your kid fiscal responsibility, as it helps them to prepare for real-life in the real world.
As parents, we understand and teach our children about the importance of great health and proper nutrition. But raising healthy, happy, and savvy children also involves giving them an understanding of the value of a dollar. Talking to your kids about finances is an important part of helping them develop a healthy relationship with money.
Financial literacy is a vital life skill and is a crucial part of adulting. Given how important financial skills are to navigating life challenges, it’s surprising that financial literacy is not taught in schools. However, as a parent, you can teach your child important real-world financial lessons to help them make smart money decisions as they grow up.
Most of you are probably thinking, “how am I to fit in all the endless activities and responsibilities, plus financial lessons?” I’m glad you asked! Enters Liz Frazier’s, Beyond Piggy Banks and Lemonade Stands, a book meant to help parents teach simple to understand financial basics to children. You would be surprised what lessons you the parent would walk away learning yourself.
To help my daughters avoid some of my own money mistakes, and to live financially fit lives, I’ve incorporated teaching the value of money through everyday real world-activities. Here are three ways you can help your kids develop money management skills, a creative spirit, and fun memories in the process.
ALLOWANCES FOR CHORES
A good way to start teaching your little one finance lessons is through allowances for chores. This approach is perfect for younger kids. However, do keep in mind they only get said allowance if they complete said chores. The money they earn from chores becomes the foundation of their financial literacy. For example, if my seven year old earns $10, she put $5 into her piggy bank and $5 to spend as she would like (or as she calls it her ‘waste money’). This activity will introduce your child to the habit of saving, budgeting, and responsible spending.
EARN MONEY THROUGH WORK
My oldest has been bringing home a W2 since she was 15 years old. I remember vividly to her dismay when she realized her first paycheck was much less than what she expected — due to tax deductions. As my daughter got older and was pulling regular paychecks, it was expected that she would play her part as a productive member of the household. Giving your child the responsibility of paying a monthly utility bill or their portion of the phone bill is great for developing budgeting and responsible money management skills.
MONEY EXCHANGED FOR PRODUCTS
While ‘allowances for chores’ and ‘pay for work’ are great ways to teach money economics, you want to be careful not to limit your child’s money experience. A wonderful way to promote creativity and empower your child’s entrepreneurial spirit is to help them turn a profit through the exchange of products. Once my youngest started asking questions about making money, I thought it was time to teach her more than just the consumer point of view. It was time to teach her ‘business for profits’ — through her own online store. And since we’re on the topic of my daughter’s online store, be sure to head on over Fabulously Fearless IRL and support my kiddo’s economic journey.
Leave a comment below letting us know how you are promoting financial literacy and empowering kiddo economics at home.
