Are you hesitant to speak with your children about financial matters because of how you’ve handled past situations? Well, you aren’t alone. Many parents are reluctant to speak with their kids about finance but haven’t considered using their personal experiences as a lesson to teach their kids about financial consequences. Although some children in Ontario are learning financial literacy in school, parents can still play their part at home as role models for their kids. Not only will you be there to support their financial literacy from the earliest years through high-school graduation, you’ll also be able to provide practice in financial decision-making at home.
Regardless of what is taught in schools, parents and guardians are still the primary educators when it comes to teaching children about earning, spending, and saving. It’s never too late for these critical lessons to begin!
Tip 1: Be a role-model.
At its core, teaching kids about money means modeling good behavior. Children start to closely observe their parents in infancy, and that scrutiny only increases as they age. Know that you don’t have to be a finance expert in order to teach them important lessons that will benefit them in the future. You may have regrets about past financial blunders, but you can use your knowledge and experience to help your children steer clear of the same mistakes. It just comes down to being a strong role model they can learn from.
Tip 2: Play money games.
Whether they are board games or digital platforms, playtime is not just about leisure. Some games teach kids about money, including old standards like Monopoly and many modern video or smartphone games. Playing these games as a family can reinforce the lessons you are already teaching your child.
Tip 3: Get your child involved in household finances.
Do not assume that your child is too young to learn about money; even the youngest children can grasp the basic concepts. If you want to teach kids about money, you need to give them hands-on experience. From trips to the grocery store or getting paid to complete chores, there are plenty of ways to get your children involved with day-to-day finances.
Tip 4: Encourage saving with a matching program.
A surprising number of adults do not take advantage of employer matched retirement plans. Why not give your kids a head start on this concept by setting up your own matching program? Lessons learned in childhood have a direct impact on their financial well-being as adults, so offer to kick in a little extra for every dollar your child saves. Not only does this help them develop healthy habits and attitudes about money, but it can help set them up for future success.
Tip 5: Increase the complexity of the lessons over time.
For young children, lessons about money may be very simple, but older kids can handle additional complexity. Making your monetary lessons age-appropriate will enhance their effectiveness, so your kids can grow up to be financially savvy adults.
As your kids get older, they likely will have a basic understanding and appreciation for money. In order to deepen their financial literacy, it’s important to give them a little more independence. That could mean letting them work a part-time job during the summer or letting them purchase necessities like clothing or a smartphone.
Teaching your kids about money may be one of the best investments you’ll make, and the principles you instill in them at a young age can last a lifetime.