We spend a lot of time encouraging children to maintain healthy habits, from eating their veggies and brushing their teeth to practicing internet safety and being kind to others. Let’s add another healthy habit to the list: financial literacy.
Financial literacy should be introduced when kids are young and should include understanding “money basics” like expenses, budgeting, and saving. Learning money management is a healthy habit that will help kids make better decisions long-term. Try the following tips this summer to practice financial literacy with all ages.
- Talk about money. When making money decisions, think aloud to model this behavior for kids. When shopping, let them know when you’re comparing costs — considering sale prices or inspecting tags for the unit price, for example. Point out the use of coupons, weighing your needs versus wants and price markups in certain situations like entertainment venues.
- Assign money-related tasks. Have children assist with bill-paying when dining out. Younger kids can simply hand a server credit card or cash (then deal with the change), while older children can help calculate the tip and total cost. When shopping, encourage kids to scan items at the self checkout so they can see the items add up and be more aware of the growing total, as well as the role of tax.
- Create a budget. Include children in budgeting for summer plans. Whether it’s for summer camps or a family outing, define an allowance and have kids help determine how to spend it. For example, set aside $50 for family night and let them figure out if that’s enough for a movie plus snacks at the theater or if it would be better spent with dinner out and a movie at home.
- Play games. Make learning about money fun through gameplay. Monopoly (or Monopoly Jr.) is a popular board game where players buy and trade properties and deal with rent. Other games that involve money are The Game of Life, Payday, Money Bags, or The Allowance Game. There are also apps focused on financial literacy, such as Peter Pig’s Money Counter or Cash Puzzler.
- Teach value through ownership. When children earn their own money, whether through chores or a part-time job, they will be more likely to value it. Have them track their hard-earned funds using an age-appropriate app like Rooster Money or Bankaroo. Older children might be interested in Greenlight, a debit card for kids that requires parent oversight. Discuss options for managing money responsibly, from a savings account to investing in stocks.
Being confident when it comes to interacting with money is a healthy habit that sets up kids for success well into their future. With the extra expenses of summer, like camps, vacations and meals, it is an ideal time to start a conversation and include children in money matters.