7 Ways to Raise Financially Literate Kids
While most parents try their best to help their teens and twenty-somethings achieve financial independence, many of us forget that we can teach our children financial literacy while they’re still very young.
The problem is, when it comes to money matters, it can all feel so overwhelming. It’s not like we were taught Financial Literacy in school. That’s why it becomes all the more important to give our children real-life experiences handling money, spending and saving, giving back, and more!
For Financial Literacy Month, why not try one (or all) of the ideas below with your kids?
1. Give them an allowance based on their age while they’re still too young to work.
So if your child is five years old, give them a weekly allowance of $5. If they’re six, give them $6 each week, and so on. Whether you’re paying them to help around the house, or are simply giving them the opportunity to handle cash in small amounts, it’s an affordable way for parents to get their kids thinking about money.
2. Let them learn from their mistakes.
Many parents feel that they need to control their children’s spending. (Because we all know what a cash-carrying kid in a candy store would do.) Still, let them experience the joys and tribulations of spending and saving by giving them the freedom to use their money on items they’d like – if they can’t afford a particular toy, they’ll have to save up until they can. Over time, they will learn the importance of saving, especially if they’re unable to buy certain items because they keep spending it all in one fell swoop.
3. Dangle a carrot.
If you’re concerned your kids will never learn to save, it may be time to take matters into your own hands. Sit them down with a toy catalogue and have them choose a toy that they really, really want… one that’s out of their budget. Do some math and see how many weeks it will take them to save up for this item, and then have them commit to doing just that. Not only is it a great lesson in patience, they’ll also be getting some accounting practice in.
4. Encourage odd jobs outside of the house.
Once your kids are a little older, have the neighbours enlist their (paid) help for odd jobs, like dog-walking, raking leaves, shovelling snow, or babysitting. Even better, help them make and distribute flyers around the neighbourhood so that they can own the process from start to finish. Working for money is a first step to understanding its value.
5. Experiment with ‘Save, Spend, Share’ jars.
Now that they’re making their own money, it may be time to introduce them to the idea of giving back to those in need. Whether it’s having a few coins handy to give to somebody living on the street, saving a few bucks each week to donate to their favourite charity at the end of the year, or leading their own mini fundraiser, it’s never a bad idea to instill charitable giving while they’re young. (Did you know? Serenia Life members can apply for funding for a fundraising initiative. Learn more.)
6. Try a money management app designed for kids.
If they’re old enough to have their own phone, you may want to introduce your children to a handy app, like Mydoh, iAllowance, or PiggyBot*. Kids can get paid on “pay day,” create savings goals, and more. While parents can track their child’s spending, giving them insight into where they can build better habits around money matters.
7. Don’t shy away from talking about money with your kids.
This book, A Wise Kid’s Guide to Smart Money Matters, is a great place to start. And good news, it’s our GIFT to our littlest members: any child – newborn to 12 years – whose parents (or grandparents) purchased them a Serenia Life Whole Life policy from February 2023** onwards. The best part? This type of life insurance can also act like an investment – which makes for another great opportunity for you to talk with them about money… and how it can grow over time.
Does your child have a life insurance policy with Serenia Life? Sign up for your free book today!
*Serenia Life Financial makes no endorsements, assurances, representations, or warranties as to the functionality or accuracy, quality, condition, or completeness of the information contained in these third-party apps.
**while supplies last
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