Show Me the Money: 5 Ways to Demystify Finance for Your Kids
- January 17, 2023
- By: Greenpath Financial Wellness
With a new year officially underway, it’s easy to become laser-focused on our own achievements and goals. You made it through the holidays! You survived the long checkout lines and onslaught of sponsored gift ads! Maybe you hammered out a family budget family budget for 2023 (but hey, no judgment if not—we can help with that.) For your end-of-year and new year achievements…all of us here at GreenPath applaud you.
But now we would like to turn the spotlight on those who might not be thinking about money matters just yet: our kids.
While many of us view children and finance through the lens of what we’re spending (the average cost of raising a child is $17,000 per year when you adjust for inflation just in case you’re curious), we don’t often consider the power of our own example.
Children’s foundational understanding of money management—how to count it, save it, and spend it—begins with the conversations they’re having at home. Lemonade stand entrepreneurism and dinner table negotiations around chore charts and allowance are a commendable start. But money talk doesn’t have to end there.
In celebration of National Mentoring Month (and also because we’re big believers that it’s never too early to start investing in financial wellness) we’d like to offer up five suggestions on how to make money a fun, applicable, and hands-on topic for the youngest members of your household.
1) Talk Candidly
Money can be a sensitive subject for families especially during periods of financial strain. If you’re tense or escalated during family conversations, this creates negative associations for your children. Create a safe talking environment where they can weigh in on everyday money choices. Debate the financial pros and cons of bringing home a new pet. Brainstorm ways they can earn extra allowance for a coveted item. Try some of these good conversation starters during dinner. Healthy attitudes toward money start at home (and with you.)
2) Turn Screen Time Into Savings
In our TikTok/tablet/app-centric lifestyles, it would be easy to turn your nose up at the idea of money apps. But just as adults benefit from fintech (48% of Americans to be precise), so can children. Creating savings goals, tracking chores and allowance earnings, and utilizing kid-friendly debit cards for small purchases can be a useful introduction to savings and banking basics. FamZoo, Greenlight, Current, and Ketshop are a few popular finance apps specifically designed with kids and teens in mind. Some charge a small download or monthly fee, but others allow your kids to make use of the basic offerings at no cost.
3) Keep It Real
Money itself can feel like an elusive, intangible concept, especially in the digital age when most of our daily transactions happen with card swiping and touch-free technology. It’s important to create real world opportunities to involve your kids in money management. Is your child’s school having a fundraiser? Encourage them to get involved (bonus if you can get involved too) and discuss the goals and the outcome around it—what part do they play? What did they learn in either being successful or falling a bit short?
On the home-front, involve your child in cost-comparisons at the grocery store, add up the costs of items as you shop, and explain staying within the parameters of your typical monthly budget. Having to make money decisions in real time solidifies concepts you may have only touched on in conversation.
4) Give Back
While stashing earnings in jars or automating allowance deposits allows children to see the benefits of having and saving towards their own personal goals, it’s also important to frame finance through a charitable lens. Some of the aforementioned apps allow kids to create “giving accounts” through which they can donate a portion of their money to a nonprofit. Not sure where to donate? Charity Navigator is a good place to learn about charitable organizations in need and begin a conversation with your children about what causes resonate with them.
5) Add to Your Library
A fun and easy way to lend additional context to money talks at home (and curriculum they may be covering in school) is to introduce your kids to age-appropriate reading material. Turn finance into a field trip and head to your local library where you can ask the librarian for recommendations or check out this fun list of reads. From Money Math: Addition and Subtraction to A Boy, a Budget, and a Dream, there are curated recommendations for every age group.
Need More Guidance?
Want to impart financial lessons and create healthy money habits at home but feeling unsure of where to begin? Check out our “Mentoring Kids for Financial Success” webinar for tips on setting your child up with healthy financial habits at any age.
In this panel guided by parents, educators, and children, you will learn:
- Real life examples of money mentorship in action
- Financial life lessons to share with children
- Tips to set your child up for a financially healthy future
“We paid everything off. It was a great decision. Go for it. I promise you won’t be disappointed.”
Litoyia | Terry, MS via ConsumerAffairs.com
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