Teaching Children Financial Literacy

It is only natural for parents to want their children to have an easier time of things when they become adults than they themselves have had. No parent wants his or her child to grow up, become independent, and then struggle financially. Fortunately, parents are in a position to teach children the fundamentals of finance so that they have a better chance of having that easier time that their parents wish for them.

Financial literacy is not something that was taught in school when I was a student, at least not in much depth. In a class called “Personal and Family Living”, we may have learned how to open a bank account and balance a check book, but that’s about it. I am not sure what, if anything has changed as far as education and financial literacy but I do know that we as parents can take it upon ourselves to help our children learn good financial habits that will serve them well throughout their lives.

One important thing to remember about children and financial literacy is that it is more helpful to begin teaching children about money early on instead of waiting until high school. By starting early, I do not mean giving your five year old a debit card, or asking your eight year old to help you compare credit card offers to see which is better. The fundamentals of financial literacy can be understood even by very young children. One good principle to begin with is “if you want something, you must save up enough money to buy it”. If your kids get an allowance, they can learn that by saving some or all of that money instead of spending it on small things right away they can get something bigger that they want more if they save up for it. Kids can also have fun picking apart commercials and learning how advertisers are working hard to get people to buy their products. These are just a few simple ways to get started; there is a lot of great information out there about other ways to help your children build the financial literacy skills that they will need in the future.