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5 Ways to Teach Your Kids About Money

Did you know, only 21 states require high school students to complete apersonal finance course? This, according to a 2020 survey conducted by theCouncil for Economic Education, has increased by four states since its 2018survey. Financial experts agree, having basic personal finance skills allowspeople to live less stressful and more secure lives. A happy, less stressful,and secure life is certainly something that we all want for our children. 

As you begin your journey to teach them of the value of money, you couldteach them about investing. Children may not need to know all there is to knowabout the best agriculturestocks right now, but a parent can teach them the basics and how to plan toinvest later. 

In this post, we will discuss five things parents can do to teach theirchildren about money and better prep them for their financial futures.

Become a Pupil anda Teacher

“I recommend that parents take the time to teach their children,because the parent often learns even more,” wrote Robert Kiyosaki in his1997 book Rich Dad, Poor Dad. Children learn from their parents. Theysee and adopt habits without us even realizing it. This applies to ourfinancial habits as well. So, learn and adopt better habits. Easier said thandone you say, but think of it as a teachable moment. As you go through themotions, take your children along with you. Explain the importance of the toolsyou employ and how they make life easier for your family.

All Fun and Games

It can be a chore to force-feed your kids information. Instead of shovelingloads of information at them, try to make learning fun. Play games based aroundfinances—Monopoly and Life are popular examples. These games can explainmundane things like mortgages and property taxes. For younger children, playoff of their active imaginations, maybe play a game or two of supermarket andsneak in tidbits about budgeting and how a shopping list saves time and money.Pick something that you know holds the interest of your children and teachingthem about money will be a breeze.

Set Up an AllowanceSystem

Instead of a traditional allowance where money is given for little to noeffort on the child’s part, treat it like a payday. Make a chore chart or graphto show that money is finite and must be earned. You can help kids calculateearnings or potential earnings with jobs completed and even throw in some factsabout taxes and deductions. This will not only teach your kids the value ofhard work but will also instill in them an appreciation for the money that theyare able to earn.

Reading isEssential

Everyone loves a good action or fairy tale book. But instead of having everystorytime session be of the fantastical variety, throw in a dose of realismevery now and then. With parents discovering the importance of teachingpersonal finance at young ages, there are plenty of child-friendly financebooks to choose from. A simple Google search yields thousands of results. Ifyou can’t find something to suit your needs, makes something up. Put a spin onclassic fairy tales and make fond memories (involving money talk, of course)that your child is sure to remember.

Savings Goals andHow to Spend

Show your kids how to save money, and how to spend money. One popular methodthat is noted by at least two renowned speakers, Dave Ramsey and RobertKiyosaki, involve plastic see-through containers that act as accounts. Uselabels like spending and saving to name the jars. Teach the importance ofputting away a little money from earned income and the difference between wantsand needs; wants often result in impulse buys, while needs are generallysomething vital like supplies for school. Allow the child to make deposits orwithdrawals as they please, and, most importantly, make mistakes. We learn andgrow the most from making mistakes. For every failed venture, be sure toexplain what happened and why. Also, allow space for questions and reflectionfrom your child as another vital part of the process.

Planning Wisely forYour Child’s Future

Teaching your kids about money can be a fun learning experience for you andyour child. ForbesMagazine has quite a few articles on teaching personal finance to children.Remember, teaching financial literacy is wise planning for the future that canbenefit your whole family. For moreinformation on other ways to plan wisely for the future, check out thispost.

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