6 ways to teach your kids about finance

Helping your children develop healthy money habits today will increase their chances for a happier life.

Teaching finance is not a top priority of the education system all over the world. In addition, few teachers report feeling competent to teach personal finance. Hence, parents usually have to be the teachers when it comes to a subject their kids will need to understand throughout their adult lives — personal finance.

The below provides a list of ideas and discussions that can help your kids learn about finance at different developmental stages:

Learning wants versus needs: the foundation of a child’s finance education begins with learning the difference between wants and needs. Asking kids whether they want or need something before they make a purchase really gets them thinking about their own money values.

Using a three-slotted piggy bank: In grade school, it’s important to teach kids about money in a tangible way. Three slots to separate dollars for saving, sharing and spending can help them understand the connection between the money in their piggy bank and the new toy they bought.

Giving back: Teaching your kids the importance of giving, such as by donating toys they no longer use, is a lesson that can stick with them for life. This is a great way of showing them that valuing money also means helping those less fortunate.

Making a budget: By middle school, children should have an idea of what it costs to keep the house running each month. Once they have a concept of a budget, get the kids involved in spending decisions for big-ticket items, like a car or family vacation, and the considerations that go into the purchase.

Explaining college: We all know it’s expensive, and teenagers should know early on in high school how loans, grants, and a college savings plan work. It’s also important to educate students about the additional financial opportunities they’ll have in life if they earn a college degree.

Getting a job: Is there a better way for your high school student to learn financial responsibility than by working part-time and paying for their gas, fun activities, etc.? This is a good time for them to get a debit card, to learn the importance of a good credit history, and to see how staying within a budget requires discipline.

Source: TheJewNews