Raising Financially Educated Kids!

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  • Raising Financially Educated Kids!
  • Teach kids the concept of money – make money tangible to them.
  • Help them set and meet financial goals.
  • Give kids ideas on how to earn money – give them allowances tied to chores.
  • Teach your kids the value of saving money.
  • Introduce your kids to investing.

Specific examples of common opportunities to teach small children about money:

Allowances: Sit down with your little one and encourage them to identify ways for them to earn money through work (e.g., put away their toys, make their bed, etc.) – help them make a list and keep a chart of all the chores they complete (chores should be appropriate for age).
The lesson is that money does not grow on trees – there is a value to money – it is earned through hard work.

Shopping: Make a grocery list and get kids to cut and organize coupons with you – then go to the store, and have them match the coupons with the items on the shelves – talk to them about a “brand” item vs. generic – as a reward, give them some or all of the money saved from using coupons.
Teach them about the importance of comparison shopping and waiting for items to go on sale. Teach them about the importance of wants (e.g., chocolate chips cookies and latest “fun” cereal) vs. needs (food staple products like milk, eggs, bread, etc.)

* Celebrate saving: Discuss with your kids an appropriate and safe place to keep their money (e.g., piggy bank, plastic container, wallet, etc.). Put a picture of the item for they are saving on the “bank” to reinforce visually.
Track the child’s progress with a colorful chart that can be posted on the refrigerator or bedroom door as a reminder of the child’s achievement.
Give them recognition for their discipline when the savings goal is reached – consider matching the amount if the goal is achieved within a certain time limit.

* Going out to eat: Compare menu items and prices (e.g., ordering water vs. soft drink). Show them the bill at the end of the meal, talk about tips and taxes.
The lesson is about double-checking to make sure you know where you money is going and that the bill is correct, and that there is no such thing as a “free meal.”

* Withdrawing money from the ATM: Teach them about the “invisible money” at ATMS and how it really works – it isn’t free – you had to earn it and save it (e.g., how it is connected to a bank).
Take this opportunity to take a tour of a bank or credit union (include a visit to the vault and your safe deposit box if possible) – explain how a bank works.

Additional ideas:

* Teach your kids how to identify coins by their size, value, and name (make this into a game using real money – be careful to supervise the kids since the coins are a choking hazard).
* Open a savings account in their name.
* Decide with your children what items of clothing or toys to donate to charity – have them accompany you to the drop-off site.
* Point out best activities are free – walk in the park, making up games, playing with pets, reading a book, talking with friends and grandparents.
* Read books about money (e.g., Lucky the Golden Goose).

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