My husband and I have two daughters. Cee is in high school and Bee is in middle school.* Given the state of the world these days (and just because parents love to worry), I’ve been thinking a lot about the girls’ future… especially their financial future. Financial know-how really matters, and the younger kids are when they can grasp this knowledge, the better.
If your children’s financial literacy concerns you… you’re not alone. Here are three ways I’ve found that can really change the game and teach your children good money habits.
Play with money.
Much of the financial-teaching-advice out there sounds like work. If you think teaching your children about money is going to be work, you’re just not going to do it.
So what if we approach it in a different way? What activities do you love to do with your children? Reading a book aloud? Playing video games? Going on a run together? What do all these activities have in common? Play. And playing is a perfect way to learn about money.
When Cee and Bee were younger, we often went to the local children’s museum. They loved pretending to work at the Kid Pizza Restaurant. Bee would give us a menu, take our order, and total up our bill. Cee was the cashier. She’d take our money and give us the appropriate change. Even then I saw Cee’s attention to detail in counting the exact amount… she’s a bit of a perfectionist.
In the next room, as they entered the “grocery store,” they wrote a shopping list and filled their kid-sized shopping cart. Bee navigated from the fresh fruit section to the freezer aisle, trying to keep up with her big sister. They also visited the candy aisle where, to my horror, they loaded their cart with bags and bags of candy!. But I watched as, once at the checkout, they had to figure out if they had enough money to pay for the candy. Almost always, they’d have to put some of the vegetables they’d gathered back (can’t win ‘em all).
Games are also great for money lessons. Bee loves playing The Game of Life. Every time we play, she’s the banker, and she recounts the dollar bills we give her to make sure the amount is correct. She likes to remind me that cheating is not allowed, MOM. As if…
Whatever your family’s means of play might be, what’s most important is that it appeals to both you and the kid(s). And whatever the activity, make learning about money fun. There are tons of resources online, like SNL’s Kate McKinnon’s talk about money with kids video.
Teach “save, spend, and share.”
My husband and I started teaching this principle to Cee and Bee when they were in grade school. When they received large cash gifts from grandparents, we would talk about saving a little, spending a little, and sharing a little. Later, as they earned a weekly allowance, we taught a ratio of saving 20% of your income, spending 70%, and sharing 10% with a charitable organization they really care about.
We’d chat about delayed gratification, or waiting to spend the money until they saved enough for something they really want. But just like each daughter has a different personality, they also have a unique “money personality.” Bee is interested in name brands and willing to spend money on status, and Cee loves finding a good deal and saving her money.
If you want to spark interest in the marvel of compound interest (it’s so, so important), the Federal Reserve Bank of St. Louis has an enjoyable video explaining growing money.
And here’s a great idea that I wished I had done…
Set up a bank account with your child at a brick-and-mortar bank.
It seems like every financial expert recommends this these days, and for good reason. Opening a bank account with a real person, learning how to fill out a deposit slip, and even going to the bank together makes money and saving tangible.
I think that kids having their own bank account is a real game-changer. Then, when children visit the bank in-person (and later, online), they see their money earning interest – unlike the money in their piggy banks. And they’re more likely to believe in investing when they see the $$$ adding up to their own money!
Give these tips a try with your kids, and be sure to let us know how they go over!
*(Not their real names because I’ve already embarrassed them enough, they say, in front of their friends.)