When your little ones are, well, little, it’s tempting to avoid money matters. Teaching kids about money probably isn’t at the top of your to-do list. Maybe you’re worried you’ll saddle them with grownup concerns if you discuss finances. Or, hey, maybe you’ve never been great with money, so you don’t feel qualified to talk to your kids about it. Rest assured, that is 100 percent relatable! Here’s the thing, though: Financial literacy for kids is one of the kindest things you can give them. If you start talking to your kids about money at an early age and keep that conversation going, it’ll pay off big in the long run — figuratively and hopefully literally as well.
Luckily we’ve gone ahead and rounded up some sound advice just in case you’re not sure how to broach the topic in an age-appropriate way.
How do you teach young kids about money?
We live in the age of social media, which means your kids will very likely hear about money on TikTok or YouTube or some other platform before you know it. And we probably don’t have to tell you that learning about money from social media “influencers” and celebrities isn’t the most realistic introduction to smart spending habits.
Ideally, you should start teaching your kid about money as early as possible. Just as you would with nutrition or social responsibility — you simply make it part of the conversation and adapt to their level of discussion. Fortunately, there are some great kids’ books that will help you do this when your child is learning to read. Around the second or third grade, kids’ math skills get to a point that makes it easier to learn about money in a more hands-on way.
How do you talk to your tween about money?
As your kids approach tweenhood, financial literacy can be learned through practice. In other words, rope them into your family finances. We’re not suggesting you let them balance your checkbook, but you can get them involved in day-to-day financial decisions. One idea? Take them to the grocery store! Have them help you decide between items to buy based on your budget. Or have them clip coupons with you ahead of time as a lesson in easy ways to save money.
How do you teach a teenager financial responsibility?
Well, here’s the million-dollar question, right? Because, really, how do you teach a teenager about anything? Or talk to our kids so they’ll actually listen? This can be a tricky age since they tend to want to tune out half of what you say on a regular basis. But they also want to go out and flex their independence more, which requires money. So, TBH, it’s a great age to hammer financial responsibility into their brains.
There are myriad ways to do this. Chores is an obvious one. Creating challenges involving budgeting can be fun. This might entail you telling your teen that if they still have 25 percent of their allowance by week’s end, they unlock next week’s allowance. If they manage to save 25 percent of their total for three consecutive months, they level up their allowance.
It’s important, of course, to make sure your teen knows that earning an allowance is a precursor to earning a living wage. It should be treated like a paycheck to be earned as opposed to a gift to be received. If your teen works outside of the home, you can still (and should still) discuss the limitations and boundaries of their budget.
What are some tools that can help teach financial literacy?
If your child is old enough to have access to a smartphone or tablet, use it to make learning about money fun. There are already some great apps available, with more being developed every day. Savings Spree, Bankaroo, Renegade Buggies, Celebrity Calamity, PiggyBot, Star Banks Adventure, and iAllowance are all great for kids ages six and older. FamZoo Family Finance, EveryDollar, and Plan’it Prom will help teens sharpen their money savvy.
You could also open a checking or savings account for your kid. Today, most banks offer some sort of account geared towards younger family members. You’ll have the power to oversee the account, and your child will have their own card as well. This will not only make them feel grown up and independent, but it will also help them learn invaluable real-time budgeting skills. Debit cards for kids, like Greenlight, could also be a smart option if your bank doesn’t offer a kid-friendly account program.
How do you teach kids about money if you aren’t great with it?
What is that thing we’re always telling our kids? Oh yeah, honesty is the best policy. You don’t have to give your children your bank statements but you do need to relate to them personally. Tell them about some of your financial hurdles to help them explain why financial literacy is so important from an early age.
If they start asking you questions you truly don’t know the answers to, come clean! Tell them you don’t have all the answers — and, very specifically, the one they need at that moment — but that you’re committed to helping them find it. Financial literacy can even be something you learn together.
Teach kids that not every family has the same means
This goes hand-in-hand with teaching children about other big life-lessons like giving to others, kindness, gratitude, and acceptance. It’s important to have age-appropriate conversations with your child that some families have more than others, and through this teach a lesson in injustice and social inequities.