What They Don’t Teach in School: Financial Literacy Lessons for Kids of All Ages

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Guiding Your Children Towards a Prosperous Financial Tomorrow

With the start of a new school year, the fall season can be an exciting time for parents and children alike. And while you can be sure your kids will learn about math, science, and history, there is a significant subject that is often skipped, regardless of grade level: financial literacy. Even when schools do offer this practical subject, it’s not usually a requirement. This means the majority of children and young adults are lacking in knowledge, experience, and skills related to personal finance. If you’re a parent wanting to help teach your children about financial literacy but you’re unsure where to start, read on to learn more about the significance of nurturing financial awareness in youngsters and discover actionable suggestions for their financial education.

Start Early with the Basic Concepts

Begin teaching financial literacy as early as possible – and start simply. Even preschoolers can learn basic concepts like counting money, recognizing different coins and bills, and understanding the concept of saving. Use real coins or play money to make learning engaging and practical.

Normalize Conversations Around Money

This is a big one, because many people still feel money topics are taboo and to be avoided. Normalize this topic in your home by incorporating discussions about money into everyday conversations. Whether it’s shopping, budgeting for a family activity, or explaining the value of items, these conversations help demystify money matters and make kids comfortable discussing finances.

Related reading: How to Begin Money Discussions with Your Family – Even When it Feels Uncomfortable

Use Allowances to Teach About Budgeting

As your kids get older, give them a small allowance, and guide them on how to manage it. Encourage them to allocate a portion to savings, a portion for spending, and perhaps even a portion for charitable giving. This hands-on approach helps them understand the concept of budgeting and gives them confidence in their ability to make smart money choices.

Set Savings Goals

Teach children about setting goals and saving toward them. Whether it’s buying a toy, a gadget, or saving for a future trip, having a goal encourages discipline while also teaching them delayed gratification. Sitting down with your kids and drawing up visual aids like progress charts can make the process more tangible and exciting for them.

Involve Kids in Family Decisions

Here’s a question to ask yourself: if your children don’t hear you discuss money matters, how are they going to learn what managing money in real life should look like? As your kids grow older, involve them in appropriate family financial discussions. This could include decisions about family vacations, major purchases, or even basic bill-paying routines. These experiences will provide practical insights into financial decision-making, while also helping them gain more confidence in their abilities to contribute.

Introduce Banking Concepts

As your children become teenagers, take some time to teach them the basics of banking. Open a checking and savings account in their name, and explain concepts like interest, deposits, and withdrawals. You’re also going to want to be sure that you teach them about the pitfalls of debt. Explain how credit cards work, the concept of interest rates, and the consequences of excessive borrowing. These lessons will help provide a real-world understanding of how banks work, the benefits of saving money over time, and help prepare kids to make wise decisions about credit and debt.

Explore Investments

Investing can be complicated even for adults to understand, but to the best of your ability, be sure that you teach the concept of investing to your older teens. Explain the difference between saving and investing, and touch on basic investment options like stocks and bonds. This early exposure can spark an interest in long-term financial planning and help pave the way to a solid financial future.

Related reading: Mastering College Savings: 529 Plans, Coverdell ESAs, and Beyond

Promote and Encourage Critical Thinking

Promoting critical thinking in kids is an essential aspect of teaching financial literacy. Encourage kids to think critically about advertisements, deals, and spending choices. Teach them to evaluate whether a purchase is a want or a need, and to consider the long-term value of their choices. By encouraging them to question, analyze, and evaluate financial choices, you’re equipping your kids with valuable skills that extend far beyond the realm of money.

Lead by Example

A lot of the financial literacy knowledge your children will pick up will come from observing your own behavior. So, be sure that you’re modeling responsible financial habits, such as budgeting, saving, and making thoughtful spending decisions. Your actions will have a lasting impact on their financial attitudes and behaviors.

Giving Your Children the Gift of Financial Literacy

Gaining a strong grasp of financial literacy is an essential skill for young minds, enabling them to make well-informed choices and construct a stable economic foundation for their future. By starting this learning process early and seamlessly integrating practical teachings into their daily experiences, you can cultivate a positive and enduring comprehension of effective money management.


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