A couple of months ago, I shared, on Instagram and Facebook that my then five year old son accessed the Amazon app on my phone, shopped around for a toy, placed it in the cart, removed an item I had sitting in the cart and placed an order ordered - all without my knowledge. Luckily, for me, I got the confirmation via email and was able to cancel the order right away. His plan? To pay me back with his allowance money. The kid was five!
The truth of the matter is, our kids are watching us. They hear what we say and see what we do. They are constantly learning and we have to be intentional about what we teach, whether directly or not. To raise money savvy kids, we have to teach them and we have to start early. According to the Council for Economic Education, only a third of U.S. states require school students to take a class on personal finance. This means, it is up to us, as parents to supplement at home, what can't be taught in school.
April is Financial Literacy Month! This is the perfect time to start teaching your children about money, if you haven't already started. It is also the perfect time to reinforce money lessons you've already started to teach at home.
Here are few tips:
1. Start the conversation early. Although It is never too late to start developing good financial habits, it is important to start early to avoid mistakes down the line, when the stakes are high. Start the conversation today. Ask questions to gauge their current understanding of money. Some great questions to ask are: What is money? Where does money come from? What are some things you can do with money? Use this opportunity to clear up any misunderstanding they have. Also, be honest. If you have regrets about going into debt or not saving enough, talk about it.
2. Model good financial behavior. You do not have to have it all together financially, to model good financial behavior. This could be your reason to start. Find a way to remind yourself everyday that your kids are watching you. Use every opportunity to teach, not only by what you say, but also what you do. Let your kids see you:
Set a budget before heading to the store and sticking to that budget no matter what.
Save money for things like vacations, a new car, college funds and retirement.
Impose a waiting period to guard against impulsive purchases.
3. Learn together. So, you don't feel confident talking to your children about money because your finances are a mess? Do not be afraid to admit you've made mistakes and share that you are also learning. Besides, it will be fun to learn together with your kids!
4. Include your children in family financial discussions. Bring your children in when you're planning your budget, paying bills, and planning major expenditures and vacations. Explain the affordable choices, and allow kids to participate in the family’s decision making process. Set a family goal that everyone can work towards.
The current COVID-19 pandemic has forced us to slow down, isolate, and connect with our friends and families in creative ways. This is the perfect opportunity to reflect on where we are emotionally, physically, and financially and set goals, with our families on where we want to be once things are back up and running.
