1. Play Games That Involve Money - One of the best ways to teach a lesson is by doing so without your child even realizing they are learning. Play games that include a financial component and help your child strategize during the game. There are an abundance of board games and problem-solving games that involve the use of money, but we also recommend inventing your own game at home. Use real coins and dollar bills and create objectives or goals that will resonate with your child. This will help your child learn the importance of budgeting and make them comfortable asking questions about money, all under the guise of play.
2. Make a Want List - An important part of financial literacy is creating priorities. We can’t have everything we want all at once, but if we plan ahead, we can hit our goals over time. This is a lesson that children can learn. Sit down with your child and have them list 3 to 5 things they want. Then have them rank them from most important to least important and figure out their cost. Once the list is created, strategize with your child about how they can achieve their wishes and set their expectations for how long their wishes may take to accomplish. This means defining what chores they could do to save enough money for their wanted item and about how many times they would need to do that chore in order to earn enough money to purchase it.
For example, if your child wants an action figure that costs $10, they can clean their room and earn $2. If they clean their room 5 times, they will have enough money to purchase their action figure. Getting a calendar and allowing your kids to mark off days where they complete a chore and earn money is another gratifying activity that will help solidify the concept in their minds.
3. Teach While You Shop - Take your child shopping and actively explain your decision-making process. When you arrive at the store, tell your child how much money you have to spend and what your priorities are. Show your child why you are picking one item over another and explain things like discounts and coupons. Additionally, give your child small amounts of money to spend themselves. You’ll be surprised at how happy your child will be to spend $2 on anything they want! They’ll also learn the importance of spending with a limited budget.
4. Split Money into Categories - Get a piggy bank that splits money into spending, saving, and giving. Teach your child about what each section represents and how they are permitted to use the money in each section. Every time you give them their allowance, talk them through how they plan to allocate their funds. Place the piggy bank next to your child’s wish list, so that their spending and saving goals are clear to them. Also, talk through the causes your child thinks are important, and when they hit a giving goal, donate the money to that cause in your child’s name. In short, teaching children about finances can be easier than it might seem. It just takes a bit of forethought, a little patience, and some creativity.
Visit our Youth Checking and Youth Savings pages to learn more about about the products available to help your child begin their financial journey.