There’s no doubt that parents are their kids’ first teachers— it’s true for reading, and it’s also true for things like money management! Maureen O’Connell, Scholastic’s Chief Operating Officer, is here with some tips for raising kids to be financially savvy.
1. Start early!
Just as reading aloud to children sets the groundwork for literacy, exposing children to money concepts from an early age sets the groundwork for financial literacy. Have a pre-schooler? Let them hand money to a cashier when you’re making a purchase, for example!
2. Start saving!
Here’s a simple one: make sure a child has her or his own piggy bank! Whether they earn an allowance or not, kids can begin to understand how money accumulates over time, and their progress is visible.
3. Distinguish between wants and needs.
Every child needs to understand the difference between wanting something and needing something. Children want instant gratification, but creating opportunities for delayed gratification is one of the best gifts parents can give children. As an exercise for older children, have them plan a meal for the family. Take them shopping with a set budget in mind, and see how they manage it while in the grocery store. Ask them to guess how much items might cost. Did they have to skip dessert in order to stick to the budget?
4. Let them make mistakes.
Children will make mistakes, even financial ones. It’s all part of the learning process. If you have a child who was saving up for something but misspent their savings, try making them “earn” the difference by doing chores, for example.
5. Lead by example.
Financial literacy is contagious! Kids are bound to form positive financial habits faster when they see their parents practicing those same habits.
Simple, practical, and age-appropriate money lessons like these can have a big impact on children’s financial literacy.
How do you teach financial literacy?