- Francesca Sacco
How to Talk to your Kids about Money
If you’re like most people, your financial education came from experiences – both good and bad. How your parents talked, acted and felt about money most likely rubbed off on you. If you want to help your children avoid the same problems you’ve experienced, and grow up with good money habits, check out these tips that will assist you in teaching them valuable money skills.
Watch How You Talk About Money
Watch the messages you may be passing on to your children when you talk about money. Simply saying you can't afford something, for example, may not convey what you really need to teach your child; that you have choices, and that sometimes you must choose one thing over another. Talk about good values and making choices, rather than just dismissing something as too expensive.
Give Your Kids Their Own Spending Power
Since most of us learn by doing, an allowance can give your child the chance to learn about handling money, while the stakes are still pretty small. Allowances can still be a tricky subject: how much, how often and for what? Most experts agree kids can handle an allowance by age seven or so, though some children start receiving an allowance in kindergarten. Only you can determine whether your child is ready for an allowance and it's best to sit down with them and explain what that responsibility means.
Teach Your Kids How to Make Money
Many kids know their parents go to work, but really have little idea of what it takes to make money. Learning how to start and run a business may be one of the most important lessons, financial or otherwise, they can learn.
Use Real Life to Teach Your Kids
There are many opportunities as you go about your day-to-day life to teach your kids about money. For example, you can have your kids help you:
- Calculate the tip in a restaurant. If they are too young for that, let them count the tip or leave it on the table.
- Double check the money you take out of the ATM by counting it.
- Keep track of what it costs to feed and care for the family pets, or create a budget for a new pet they want.
- Plan a special evening meal within a fixed budget. Plan the menu and shop for the food as a family.
Teach Them About Credit
If your kids do want to borrow from you, teach them how lending works in the real world! Charge an interest rate and draw up an agreement. You can make up payment coupons or use another system to keep track of their payments. Be consistent with it and don’t let them borrow again until they’ve paid off the first loan!
Encourage Financial Education
At 7 17, we value the importance of financial education, which is why we’ve introduced several tools for our members to utilize to improve their financial health. We know the importance of learning about money at a young age, but know the topic isn’t fun or easy. The Dollar Dog Kids Club at 7 17 Credit Union is designed for children 12 and under to help them learn the value of saving and spending responsibly. Our new Dollar Dog website is jammed full of fun tips to instill positive spending and saving habits in your child. And since April is Financial Literacy Month, now is a great time to introduce the program to your little saver! To fetch some fun, visit our Dollar Dog Kids Club at www.717cu.com/dollardog.
These are just a few ways to teach your children valuable money skills. For additional tips, visit Talking Money with Your Kids at www.717cu.com/KOFE. Once you proceed to the KOFE site, select financial publications from the KOFE table drop-down menu. 7 17 has partnered with KOFE (Knowledge of Financial Education) to provide free financial education tools to help support members’ long-term financial health. Resources include publications, videos and more. Plus, you have free access to financial coaches, seven days a week!