Teaching Kids to Be Financially Literate

Parents and grandparents can have a huge influence on teaching kids about money. Your actions can influence their perception of money and influence their spending behaviours. The best way to teach kids about money is through your own actions and leading by example. There are many things you can do to help your kids learn basic money lessons and become more financially literate. Here are my top five suggestions:

1. Give Them Chores

Rewarding your children for their work can teach them about how making money works in the real world. If you give them a list outlining what needs to be done, in what timeline it should be completed, and how much each chore is worth, it teaches them the value of a dollar. As well, earning money rather than expecting it teaches kids the lesson that money never comes for free or without work.

2. An Allowance Can Teach About Budgeting

If you give your child an allowance you can start teaching them valuable lessons about managing their money. If they want to buy two toys that would cost their entire allowance they have to decide if it’s worth blowing the rest of their week’s budget on, or if they should get one. At some point they’re bound to splurge on an impulse buy and run out of money, but this mistake can be a good lesson in and of itself to teach them about the consequences of overspending.

3. Have Them Make a Wish List and Save For It

Every parent knows that although you want to give your kids the world, you can’t give in to their every request. However, all of their demands may come with a silver lining: the opportunity for a lesson on saving, spending, and goal setting. Next time they ask for a new game or toy, sit down with them and make a wish list of all of the things they want. Then help them work out how they can save the money to buy the toy without your help: whether it’s cutting their spending and saving their allowance for the next few weeks or doing extra chores and babysitting, this lesson can teach children a valuable lesson about saving money. As well, helping your child realise the pride of working hard to save and buy something with their own money is invaluable.

4. Plan Your Shopping

Have you ever found that when you grocery shop with your child, your cart fills up quicker and your bill gets more expensive? All of us fall victim to impulse purchases every once in a while, but kids can be especially impulsive shoppers, partially because they don’t fully understand the true cost of things. Taking your kids grocery shopping with you and teaching them how to shop within a budget is a great way to help them develop responsible shopping habits. Plan a grocery list with them in advance and map out exactly what you need. Of course special exceptions can be made when you’re shopping but help them be mindful of what they’re putting into the cart and how much these additional purchases will cost.

5. Sharing is Caring

Teaching kids to share their money and donate to charity is an important moral money lesson for them to learn early on. It teaches the lesson that you can use money to help people rather than just buy things for yourself. As well, remind them that it isn’t about how much they donate, but rather that every bit counts, and to donate what they can. Teaching generosity and the value of helping others is always important.
 


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