Whether you want to teach your kids the value of hard work and a dollar earned, or more advanced concepts like investing, there are age-appropriate ways to introduce these concepts to children of all ages. It's easier than you think to teach your children basic financial concepts at home that will serve them throughout their lives.
What is financial literacy?
Financial literacy is the ability to understand and implement personal finance concepts, like spending less than you earn, saving money for retirement, and investing.
Kids generally don’t learn about handling money in school, which means it’s up to you if you want to help your kids grow into financially responsible adults. Check out the ideas below for five easy ways to help your kids learn financial literacy.
1. Make it fun with games
Let's face it. Financial concepts can be complicated and sometimes boring for a younger audience. To get your kids engaged, positioning topics like saving, budgeting, or investing as a game is a great way to get their attention.
Depending on your child's age, a board game like Monopoly or online games like Financial Football, where kids count and manage money, are great opportunities to discuss how the in-game transactions relate to the real world.
There are also simpler games available for younger children that focus on creating a budget or identifying and sorting different types of coins, like the browser game Breaking the Bank.
2. Be open with your finances
Opening up to your children about your financial situation is a great way to help financial concepts hit home.
If you're weighing the decision to take a family vacation or get a new puppy, let them see that process. Take them grocery shopping and explain how much you can spend and why. Have them sit with you while you pay bills, so they begin to understand everything it takes to run a household.
Giving kids a chance to see how their parents think about spending, budgeting, and saving allows them to consider how they might do the same in the future.
3. Teach them to earn
One of the biggest lessons of financial literacy is that every dollar has to be earned. Establishing a chore chart or list of ways for kids to make a bit of money for going above and beyond at home helps them understand the correlation between hard work and earning money. This, in turn, means they are more likely to appreciate a dollar's value as adults.
4. Open a kids savings account
Starting a savings account for your child allows them to save their hard-earned money and get familiar with delayed gratification.
Kids savings accounts are unlikely to have high interest rates, but kids can still earn a few cents on their money and see how their saved money builds up over time, as well as practice banking interactions like depositing and withdrawing money and writing checks.
5. Let them invest (with low stakes)
A concept like the stock market can be incredibly confusing for children. Try making it relatable by giving them a single share of a stock to a brand they recognize. Gifting a share of a favorite brand, like Disney or Mattel, for a birthday is a fun way for them to follow a company's value and start to gain an understanding of how investing works.
Teaching kids the personal finance at a young age sets them on a path to financial competency as an adult. Not only will they be able to make informed decisions easily, but they can use their lessons learned to start a cycle of generational financial literacy that you can be proud to have started.
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Original Source: 5 Easy Ways to Teach Your Kids Financial Literacy