It’s crucial for your family to know the basics of financial literacy, but how do you approach teaching them? Luckily, you’re making financial decisions every day\u2014you simply need to let your kids in on the conversation.<\/p>\n
What is Financial Literacy?<\/h2>\n
Financial literacy includes many different financial skills and concepts; to be financially literate simply means having the know-how to make wise decisions with your personal finances\u2014like managing a budget, borrowing money, paying for insurance, and saving for retirement.<\/p>\n
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Make it Real<\/h2>\n
Teaching financial literacy doesn\u2019t have to be a formalized lesson for your family. Experience is often the best teacher. You can give your children that experience by involving them in what you\u2019re doing in a way that makes sense for their age.<\/p>\n
For example, a trip to the grocery store is a great time for a child of any age to get some practice.<\/p>\n
\n- Pre-K and Early Elementary School: Explain that everything you\u2019re buying costs money. When you go to check out, let them swipe the card or hand the money over to the cashier and explain the transaction.<\/li>\n
- Elementary school: Give the child some money to be in charge of while shopping\u2014 maybe $2-$5. Explain to them that they can spend that money however they want while showing them tradeoffs\u2014like getting multiple inexpensive things means you can’t get one expensive item or vice versa.<\/li>\n
- High School Kids: Let your teen take control of the groceries for one trip. Give them a budget and a list of things that you need. From there, let them manage the money for that trip and the best way to divide it up. For an extra challenge, you may include that you need \u201csnacks for lunches,\u201d but let them decide what exactly that means. If they buy too much or something too expensive, they won\u2019t have enough left over for the other essentials on the list.<\/li>\n<\/ul>\n
The key with these examples is getting your kids used to thinking about a budget and considering how much things cost when making decisions.<\/p>\n
Have Some Fun<\/h2>\n
Many find that talking about finances causes either boredom or anxiety\u2014or perhaps a mix of both. But it doesn\u2019t have to be that way, especially not for you and your kids. Managing your finances correctly is the pathway to buying a new home, going on that vacation you\u2019ve always wanted, or spending a fun night out with loved ones. Of course, it\u2019s important to balance any conversations with the appropriate warnings and precautions, but the goal is to get your kids excited about the possibilities.<\/p>\n
If you\u2019re looking for some help in adding fun to the conversation, consider giving the\u00a0Banzai Courses<\/a>\u00a0a try, which balance fun and education with choose-your-own adventure type options that allow kids to make financial decisions and manage their own budget.<\/p>\nDon\u2019t Be Intimidated<\/h2>\n
Financial literacy covers a huge range of topics, some of which can get pretty complicated pretty fast. Thankfully, you don\u2019t have to be an expert on everything in order to start the conversation. But the more you\u2019re willing to touch on the tough stuff, the better foundation your kids will have when they\u2019re forced to confront those things themselves. This could mean getting into a discussion about 401Ks, taxes, investments, housing costs, and plenty of other topics that may seem intimidating on the surface. You can use the resources on this site or visit a branch and chat with one of your local finance experts if you\u2019re looking for help.<\/p>\n