Why is it important for your child to learn about finances?
From a young age, kids learn that money means something, but what about finances? When they get a birthday card in the mail from their Auntie, they open it with excitement to see if maybe something special will fall out. Because sometimes their Auntie puts a special $5 surprise in that cute little birthday card.
Your child knows that when they lose their tooth, somehow a tooth fairy pops up in the night and exchanges that tooth for a shiny coin! The squeals of excitement erupt in the morning when they find that coin and quickly tuck it away in their piggy bank. Often times when they’ve received money, they walk through the toy aisle with the thrill of knowing something there can be theirs! And all thanks to that money that they have. But finances are so much more than just receiving money and rushing off to purchase something. Money has value. Money has purpose. And teaching our kids that from a young age is extremely important.
Your child knows that money matters, but do they know just how important finances are?
It’s imperative to teach kids that money isn’t just a way to get what they want, but rather a means to provide for what they need. Money is a tool that needs to be used correctly in order to get an abundance of growth from it. Talking to your kids about money even when they’re young is so beneficial. Teaching them the value of the dollar, and even how to save for long-term goals, and how to spend responsibly is so important. For example: Rather than running out to the store to purchase a small, cheap, toy every time they get a little money for their birthday. Teach them about saving that money for a long-term, exciting goal! Like buying a nice new bicycle in the spring.
Help your child understand donations.
Teaching your child about the importance of donating, and helping others through the profits which they have, is such a wonderful thing to do. Try finding an opportunity to help together. For example: If your child really loves animals. You could always tell your child that if they raise $50 for the humane society, you will match it with $50! Educating your children that money isn’t just a fun object to get them what they want. It’s something you must work for, care about, and that they can then use to help other people get what they need also.
It doesn’t have to be overwhelming.
Spending time teaching your child about finances doesn’t have to be overwhelming or boring for either of you. Start with simple ways, when they’re young. Like when you go to the store to get groceries, your child will see you pay for the groceries. And although, it can be as simple as tapping your card on a machine. It’s still your money being transferred from your account to the stores account in exchange for groceries. Explain that to your child. Show your child the receipt from the groceries. Show them how much money it costs to feed your family. Explain the value of the money that they have.
Create opportunities for them to earn money.
Try creating opportunities for your child to earn a little money. Your child needs to have money of their own so that they have the opportunity to learn how to make good decisions about how to use it. Maybe you could give them simple chores around the house in order to earn a weekly allowance. Something simple like “Help me fold the laundry” or “Put the dishes away” or “wash the car”.
And once they’ve earned it, you can give them their allowance for the week. Then help them understand the importance of what they just earned. If you don’t have loose change floating around the house to pay allowances, that’s no big deal! Try setting up a bank account for your child in their name. Then when they’ve earned their weekly allowance, you can transfer their allowance right into their very own bank account. Then show them that their account now has a little more because of how hard they worked. You could even get them a journal to keep track of the money that they have in their bank account.
So many fun lessons to be learned!
There are so many more excellent lessons that your children can learn about money. Like how their money can grow, the importance of giving, and good spending decisions. But the very best source of education about financial habits comes from you. Yep, that’s right. You need to model good financial habits in order for your child to pick up good spending/saving habits. Just like your kids copy the way you talk and walk; they also copy the way you spend.
Don’t become overwhelmed by the task of teaching your child about finances. There are many resources out there that can help your child learn wholesome financial habits. Included in that is our very own Financial Literacy Mini Unit. In this excellent mini unit, your child will learn about Canadian coins & bills, their names and values. Your child will learn how to count money with coins and bills. And even get to play fun grocery store games, exploring methods of payments. They’ll have the opportunity to learn more about purchasing, earning, spending, saving, investing and donating. There are just so many fun lessons to learn, and we are excited for your child to learn them with us!
Learn more about the Financial Literacy Unit here:
Check out this excellent article by Forbes about ‘How to Teach Your Kids Good Money Habits’: