Written by the Own Your Destiny Team
It’s amazing how quickly our kids can pick up new habits and learn new things. They start by learning a language in the first few years, learning to read, and learning to ride a bike. Their seemingly endless string of questions all funnels into a mind that is constantly learning and acquiring new information about the world. Some of the best instruction you can give your kids to prepare them for the future are money-saving tips to improve their financial literacy. Here are some ways you can pass down that wisdom and raise money-smart kids.
1. Model Money Smarts
It a well-known fact that kids learn from watching what you do and imitating it. However, we often keep finances hidden away from our kids. Why not take your kids with you next time you meet with your money coach? Let them attend and even be part of the meeting. Let them hear the kinds of questions you ask, and the advice your money coach provides. Learning to be financially literate means being exposed to financial matters early and often.
2. Go Grocery Shopping
The temptation is there to leave the kids with someone while grocery shopping. Shopping is likely a chore you want to accomplish quickly, but there are definite benefits to getting your children involved in the process. Explain your list and why buying just what’s on the list is good for the family. Consider giving them a budget for a treat and letting them decide how to use that money – with guidance from you, of course! Money-smart kids are involved in financial decisions from a young age.
3. Demonstrate Your Savings
We often think of money in savings as money set aside and forgotten about until we need it. A big part of raising kids with money smarts is growing a pattern of savings in their lives. Let them see that some of your money each month goes into savings. When you make a purchase from money that you had saved up, make sure they understand where that money came from. Financially literate people understand that money comes from somewhere. Invest in the piggy bank and make setting money aside a fun habit in which they’ll enjoy participating.
4. Mistakes Are Great Teachers
As parents, we want so much to keep our kids from making mistakes that cause pain down the road. However, childhood is a great time to feel the sting that comes from small mistakes, so we learn to manage the grief of larger mistakes later in life. So, you’ve counseled your child that spending all their money on bubblegum is a bad decision, but they still insist that is what they want to do? Money-smart kids have blown their entire allowance on something foolish in the past. It never fails to produce a bit of pain in the near future. Allow the small mistake now to be a teachable moment.
Raising money-smart kids only requires using the everyday experiences of life to help them develop financial literacy and make smart financial decisions later in life.