By Julie Weaver
As parents, we’re always looking for “teachable moments’’ with our children—those small occasions where we introduce the skills and values we hope they learn as they grow.
Understanding money and finance should certainly be one of those core values, but it’s a topic that’s easy to ignore. As we nonchalantly swipe our credit card, transfer funds to pay bills online or contribute to a cause or charity this season, we’re missing the opportunity to teach our children—not just about money, but also about goal-setting and decision-making.
The need for this learning at an early age is huge. Studies show that more than half of adults are financially illiterate and 61% of Americans live paycheck to paycheck.
Meanwhile, kids see and do everything we do—the donations we make, the things we buy and the way we think and talk about money. We can show them how to create good financial habits by letting them see us making financial decisions. Building this understanding early can help young people hone the skills and awareness necessary to succeed financially as adults.
How can you have these important conversations with your children? This holiday season (and all year long), there are many natural opportunities to do so. Here are some tips we offer at the Maryland Council on Economic Education, a nonprofit organization working with educators and students across Maryland to bring financial education to classrooms and families.
Bargain Hunting: Help your kids understand that one price does not have to fit all. As you shop with them, make a game of deal hunting. Challenge them to find similar products at different prices and explain possible reasons for the differences.
More Than Cards: With so many of our finances processed online or through plastic, kids may not know about banks, cash and what the numbers on a screen really mean. When using cards, explain to your kids how they work and the process of how funds go from your paycheck to your bank to the store.
Charitable Giving Lessons: This holiday season is a great time to include children in your decision-making process around which causes to support and how. Ask them about causes that matter to them and go over ways to financially support those causes. In doing so, children will learn about the power of money, how donations keep many organizations afloat and the tax implications of giving.
Encourage Entrepreneurship: Children don’t understand how you make money unless you show them, or even better, unless they show themselves. Invite your children to be creative in making their own money, whether through doing small jobs around the house or selling things they make. What they earn (from you) needn’t be much—it’s the concept that matters.
Budgeting Basics Through Meal Plans: Everyday tasks like preparing meals are great opportunities to introduce money concepts. When grocery shopping, give your child $10 and challenge them to create a meal for that amount. Help them compare products and decide what to buy. They’ll learn about costs and budgeting.
Show, Don’t Tell: Visualizing “money” helps children understand what it is. Rather than charge every expense at a store on a credit card, use cash. When you get home, put the change from your purchase in a jar as your “savings” for a treat or purchase your children want. Your kids can regularly check the amount of the savings to see how close they are to the purchase. (This is also a great way to use math skills.)
Encourage Support from Your School: Classroom discussions and lessons about personal finance reinforce what we teach at home. Encourage your school’s leadership to incorporate lessons about personal finance in the classroom. There are fun, interactive activities for math, reading and social studies for every grade level. MCEE’s website also has lots of tips, information and classroom activities related to personal finance.
Julie Weaver is the executive director of the Maryland Council on Economic Education, a nonprofit working with K-12 educators and students across Maryland to enhance personal finance and economics education through teacher training, classroom resources and lesson plans, engaging student experiences and curriculum development.
