It’s never too early to begin teaching children the basics of finance. If they are old enough to ask for a toy, they are old enough to begin learning financial lessons that will last a lifetime. Age-appropriate lessons can be found in everyday experiences. Look for teachable moments at the grocery store, bank, or when planning a vacation.
At the bank
- Bring your children to the bank and show them how transactions work. Ask a bank employee to explain how the bank operates, how money generates interest and how an ATM works.
- Discuss how your pay is budgeted to pay for housing, food and clothing, and how a portion is saved for future expenses such as college tuition and retirement.
At the market
- It’s easy to give clear examples of “needs” and “wants” using different kinds of foods at a grocery store. Milk (for strong bones) is a need; soft drinks are a want. Explain the benefits of comparison shopping, coupons and store brands.
- Assign chores and give them a monetary value. Discuss ways to budget and divide allowances. Encourage children to set a financial goal, such as saving for a bike, and figure out how to achieve it.
- Explain the many ways that bills can be paid: over the phone, by check, electronic check or online check draft. Discuss how each method takes money out of your account.
Using debit/credit cards
- Go over the features of different types of cards, such as ATM, debit and credit cards. Explain that debit cards access money in your bank account, while credit cards are loans that must be repaid.
- While online, explain to your children how valuable their personal information and privacy is to you, to them and to online predators. Discuss the risks and benefits of sharing certain information. As a family, make a list of rules for keeping personal information safe online.
Planning a vacation
- Whether you are planning an outing to a local amusement park or a once-in-a-lifetime trip, emphasize the value of saving as a family. Set a family savings goal that involves your children. Figure out the cost and discuss ways everyone can help to reach the goal. Give each child a set amount to spend on souvenirs and allow them to make their own choices.