Teaching Money Smarts

Money can sometimes be a tricky topic, can’t it?

Whether you’re conversing with a fellow adult or pondering how to introduce the concept to a child, it’s not always a straightforward conversation.

Yet, it’s undeniable how crucial financial literacy is.

A >>recent survey by Charles Schwab<< emphasized its importance, revealing that a whopping 63% of people in the US see it as a critical skill that kids should learn in school.

And yet… real financial literacy is not taught to most children, setting them up for a lifetime of decisions that don’t serve their long-term needs.

Let’s talk about that.

Why Start Young? Every day, we make financial decisions. If kids grasp some fundamental monetary concepts early on, it paves the way for informed choices throughout their life journey.

Now that you know the ‘why’, here are a few ways to approach money topics in a kid-friendly way.

Making Sense of Inflation: Instead of groaning about rising gas prices, highlight the change in prices over time and relate it back to the family budget. Likewise, at the grocery store, use everyday products to teach about price hikes. Try this:

“This chicken costs $18 now. Last year it was $13. Our budget for the week is $200, so that means we have to save money on other groceries, or spend more to get what we need. What do you think about that – can you think of ways that we might be able to save?”

Learning the Real Value of Money: Let kids experience the effort behind earning through chores. It not only familiarizes them with hard work but also lets them feel the weight of parting with money they’ve earned. Try this:

“If you re-organize the pantry and walk the dog for the next week, you’ll earn $50 towards that Nintendo Switch you want.”

Credit Card vs. Debit Card: Use real-life scenarios like checking out at a store to differentiate between using a credit card and a debit card. Try this:

“If I use a debit card, the store gets paid directly from my bank account from money I earned from working. If I use my credit card, the credit card company lends me the money to pay the store and I must pay it back later”.

Transparency for Financially Challenged Families: When faced with financial challenges, inviting kids into budget discussions can mold their perspective. When they’re aware of household expenses, they’re more likely to empathize with financial decisions made at home. Try this:

“My job pays $4,200 a month. Our expenses are $3,400. We still need to save money in case of emergencies. That means we can’t go on vacation three times a year like your friend does. Does that make sense?”

Remember, every real-life situation can be a teaching moment.

Let’s ensure the next generation is equipped with the knowledge they need to navigate their financial futures confidently.

If you’d like to delve deeper into your own finances and look for ways to make your future outlook even better, let’s talk about it. Book a 15 minute consultation by calling 330 836 7800 EXT. 1, or >>click here to reserve a spot online.<<