You don’t need a classroom to teach your kids about money—life is full of opportunities! In fact, if you’re waiting for them to receive a classroom education, there’s a good chance your children will never receive one.
Currently, only 24 states in the U.S. require a personal finance course as part of the graduation requirement. Though this issue is receiving growing attention, you don’t have time to wait for curriculum revisions.
The best thing you can do is get them involved in money-related activities you’re already doing, like grocery shopping. We’ve compiled a list of simple activities like grocery shopping that make perfect opportunities for your kids to learn about financial responsibility.
1. Ditch the Piggy Bank for a Clear Jar
Piggy banks are an excellent tool for teaching young children about the importance of saving money. However, switching out the ceramic pig for a clear jar can add a visual aspect to the process that other storage containers don’t offer.
Every time your child adds to the jar, comment on how fast the cash level grows. Point out the number of coins and dollar bills that weren’t there last week. The visual will confirm that the saving process is working towards their end goal.
2. Set Proper Money Handling Habits
The apple doesn’t fall far from the tree. Your kids will likely follow in your footsteps if you practice proper money management.
Kids notice everything. If you put down your credit card every time you purchase items, they’ll notice. This can lead to them not understanding the concept of money and how credit companies work. Keep an open conversation about money and choices, especially between ages 6 and 12, when their minds are the most flexible.
3. Show Them the Actual Cost of Items
It is easy to tell your kids no when it comes to buying a new toy or a treat. But it’s also essential to explain to them why you said no.
For example, it is easy to say, “Sorry, we can’t buy those rollerskates. They cost $25.” That doesn’t really explain why the answer is no. Instead, show them how much money it would take from their savings jar. That visual aspect of $25 getting removed from their piggy bank will show them the ramifications of spending that money. If they still want to spend their money, their decision is considered responsible.
4. Explain Weighing Options
When talking to your kids about spending decisions, explain the thought process and decisions you’re making. For instance, when they choose a new toy to buy, explain to them that one is more expensive, so if they buy the latest toy truck, they won’t be able to buy the smaller block set.
Is it worth giving up the block set for the fancy truck? Or would they rather have the block set plus a few other smaller toys instead?
5. Make Them Work for Allowances
Having your kids complete chores or tasks around the house can teach them about an honest living wage. Give them a checklist with simple cleaning assignments, such as sweeping the patio, washing dishes, or taking out the trash.
Teach your kids that an honest day’s work can lead to them buying goods for themselves. It could be one of the most important lessons they can learn.
6. Avoid Impulse Buys
Many of us fall for impulse buys. It’s so easy to see something we want, throw it in the cart, and worry about the price once we get home, far away from the store.
Kids can be even more impulsive. I’ve told my kids to wait 48 hours for purchases over a specific price. After that time, they might change their minds about spending that much money on the item they were willing to drain their savings account for just a few days ago. This shows them the benefits of level-headed purchasing.
7. Promote Giving Back
Giving a portion of your earnings to a program benefiting the needy or volunteering your time to help others can help teach kids that generosity can change lives. Have them pick a local charity or church to donate to.
Even if it is as little as $5 a month, this can help set them on a path to an unselfish relationship with money. Hopefully, it will show them that giving makes them feel good and is not just something you do as an adult.
8. Teach Them to Live Within Their Means
In high school, I saw teenagers my age with nicer cars and clothes and living a fancier lifestyle than I did. I was so envious that I asked my parents why I couldn’t have a better car.
I remember my dad explaining that my older car was still working fine, and keeping the older car just allowed me to save more money for college or future travels and excursions. That level-headed approach to money helped me understand his mindset and agree that a new car wouldn’t be practical at that moment.
9. Give Them a Bank Account
Your kids should have a bank account by the time they’re teenagers. Whether they’re getting funds from an after-school job or allowances, teaching them to balance a bank account is a vital skill for growing adults.
This allows them to be in charge of their own finances and succeed in the lessons you taught them at an early age. Hopefully, they will be savvy with their money and watch it grow in a savings account instead of frivolously spending it all once they get paid.
10. Get Them Saving for College
College is expensive. If you don’t have the luxury of scholarships or a rich uncle, you may face a hefty bill for a four-year degree.
If your high schoolers know money is tight and that they’ll have to pay for part of their college costs, have them put aside a portion of their summer job in a college fund. Setting aside a certain percentage can add up over the months and help them pay for university costs like books and meal credits.
11. Explain How Student Loans Work
I didn’t understand how student loans worked. I only understood interest rates and how they would affect payback methods once they were late. I ended up paying an arm and a leg at insanely high interest rates.
While student loans are an option, they do come with a costly payback plan. Explain the benefits of community college, in-state universities, and working to pay tuition instead of borrowing so much.
12. Explain the Dangers of Credit Cards
Much like student loans, credit cards target young adults who are uninformed about how to use them properly. It’s not just free money. As an 18-year-old, you will most likely get a credit card with an astronomical interest rate.
Sure, it’s convenient to charge your expenses and worry about the bill later, but what happens when it comes and you can’t afford it? Next thing you know, you are in debt, and your credit score is suffering. It can be hard to come back from that, so it is better to avoid it until you’re mature enough for a credit card.
13. Set a Budget
It doesn’t matter how much or how little your kids make. Setting a budget and teaching your kids how to follow it is a lifelong skill they’ll remember. Many free apps are available to make this process as easy as possible.
Most of these apps can be directly linked to their bank account to provide direct deposits to savings or provide alerts when funds are low.
14. Discuss Career Choices and Salary Opportunities
I wish I’d had a mentor explain that some college majors lead to jobs that don’t pay very much. As an art major, I never thought about how I’d make a living with my degree. Meanwhile, my friends who studied business and engineering were graduating with prosperous careers immediately, while I struggled for many years.
It is important to do what you love. Still, young students must have conversations about fields that will leave them needing a second job. Why spend six figures on a degree when you know that field maxes out at $50,000 annually? It just doesn’t seem practical.
15. Set up an Emergency Fund
Stress the importance of an emergency fund. An emergency fund is a savings account that can help you financially if you’re without income for some time. Experts maintain that your fund should cover you for up to six months, if not longer.
Funnel part of your salary into this emergency fund. If you need money for car repairs, medical bills, or just some extra cash, you can take it from there instead of relying on credit cards.
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As Gen X journey through the ever-changing landscapes of work, relationships, and personal growth, they’ve gained insights they wish to impart to their younger selves. These life lessons are not only reflective of their generation but also universally relevant. Let’s delve into 18 profound lessons that Gen Xers hope to share with the next generation.
The cost of living in the United States has skyrocketed in the last four years. So, what happens when the cost of living goes up? We stop buying certain things. I can think of many items and luxuries I’ve let go of because they’ve gotten so expensive. Honestly, with the increasing prices, it’s not worth it. Maybe you’re experiencing the same dilemma. It’s hard to decide how to buy the things we need without breaking the bank. To help with those tough decisions, we curated these things based on luxuries and wants instead of needs. Some may be more difficult than others to let go. However, in the end, we think it makes sense. What about you?
Source: How to Turn 15 Everyday Moments into Money Lessons for Your Kids
