If you’ve been meaning to talk to your kids about money, April is the perfect time to start. In addition to Credit Union Youth Month, April 12 marks National Teach Children to Save Day!
This special day was created by the American Bankers Association to promote financial literacy among children. In the spirit of the occasion, here are three real-world experiences that parents can use to introduce kids to personal finance.
Have your children make purchases
Purchasing something is perhaps the most direct way to understand how money works. Therefore, it’s a great opportunity for your children. Try including them the next time you make a purchase.
Whether it’s at the supermarket or movie theatre, give your kids cash to hand to the cashier, and then have them collect and count the change. (Note: This works best for cash purchases. Using a card may be a little too abstract.)
Lesson: Money is used in exchange for goods and services.
Open a savings account with them
There’s no better way to explain saving money to a child than to open an account in their name for this specific purpose. It might be tempting to save time and do it online, but take your child in person to your financial institution.
Show them the physical building, point out the ATM, and have them meet the people behind the counter. Reinforce the roles that financial institutions play in managing your money. After the account is open, hatch a plan together for making regular contributions to it.
Lesson: While piggy banks are cute, savings accounts are the best option for stashing your cash.
Inspire them to start a business
There’s a reason why lemonade stands have stood the test of time. These micro businesses represent many children’s first exposure to earning money. If lemonade’s not their thing, encourage them to offer pet sitting or yard work to your neighbors.
Lesson: Money is earned through work.
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