Financial Literacy for Kids

Teaching your child about money in their early life is important. When you start them off early, you're showing them money isn't a big, bad monster hiding under their bed. 

Money helps us pay for education, new clothes, awesome toys, and fun trips. It also helps us when we need help fixing our cars or moving to a new home.

Creating familiarity with money talk encourages your children to be friendly and honest with their own bank accounts as they transition into adulthood.

Interactive Games

A great way to familiarize your child with the topic of money is by playing interactive money games.

Ask your children to create their own imaginary restaurant. Instruct them to create their own dishes, menu items, and food prices. As you order your 'food', explain to them how much money you have and how that affects what you order.

Dress up with your kids by acting as different professionals, such as doctors or teachers. Explain to them the concept of a job and what you have to do to get a job. 

Do your kids prefer board games? Break out the old Monopoly board to teach your kids about money in a fun and competitive environment. 

Saving money is important, in the case of an emergency or unexpected life event. However, there's no need to be like Ebenezer Scrooge. 

Giving is as important and fun as spending, if not more so. A study conducted by Nature Communications has shown us that being generous leads to long-term happiness.

Donating to our favourite charities allows us to support the causes we care about. Money is the battery power behind political campaigns, conservation projects, and impactful philanthropies. 

Buying gifts or giving money to our friends allows us to care for the people we love most. It's exciting to see the positive power of money!

Take time to demonstrate how to save money. Explain to your kids that saving money (or even arcade tickets) may not get them the small toy they want right now, but it'll get them the big prize they want in the future. 

If your children are in their early to late teens, chat about the importance of a savings account. This savings account may pay for larger purchases (such as an apartment) or help during emergencies that'll inevitably happen.

Because we live in a tech-savvy world, there are plenty of money-saving tools to show kids, such as Insurdinary.

When living in a world of instant gratification, it's crucial to explain how to spend wisely to kids. Delayed gratification is an important concept to learn.

Talk about how the items we buy cost different amounts. Some things are of higher quality and last longer but cost more. And we don't always need the hottest technology item just because everyone else has it!

Are your teens wanting something like a fancy coffee or a shirt at the mall? Explain to them the occasional fun purchase is okay, but it's important not to make a regular habit of it if when saving.

It's hard to teach your kids about financial literacy if you don't take the steps to be an effective mentor. Set a good example by creating a personal budget, saving money, and paying off debt.

Educational sites, such as Coursera, offer free courses on everything from financial literacy to Greek mythology. Take time to learn more about money. If you don't have the time, listen to a financial podcast on the way to work.

Put your knowledge into action by sitting down with your household to create a budget. Budget how much the house will spend on groceries, eating out, pet supplies, and bills each month.

If you have a job, talk to your children about your responsibilities and the school you went through to get your job. Even on days it's difficult, demonstrate the importance of showing up to your job on time. If you've built your own business, talk to them about what it takes to launch a company from the ground up.

Openly chat about money with your kids, no matter their age. There are many instances each day to talk about money in a natural and non-threatening way. 

Are you eating out together as a family? Remind your kids of the monthly restaurant budget. Ask them to compare menu item prices, and chat about how their selections will affect the budget.

If your family is in a tight spot with money, be transparent about it with your kids. Explain to them how your family doesn't have a lot of money to go to the movies or amusement parks.

You can still have plenty of free fun by putting together a family movie night in the living area!

Part of being a parent is lending money to your children. Many times, parents don't ask for their money to be returned.

However, once your children have their own jobs, it's a valuable lesson to occasionally act as their creditor. Offer to help them with large purchases if they promise to pay you back.

Sit down with them to create a payment plan. Explain how much you expect to receive each month and how they can pay back what they owe with each paycheque.

We've all made major money mistakes. It's part of being human. 

Your children will buy things they don't need or spend their savings accounts on non-emergencies. They may see other kids with material goods they want and do what they can to fit in.

Whenever they make a money mistake, chat about why they did it. It's important to understand their reasoning, no matter how odd you think it is.

Once you have a better understanding of their choice, brainstorm ways to make better choices in the future. Open up and share examples of your money mistakes and how they affected you.

To help your children make better financial decisions, offer saving incentives. These incentives don't have to cost much or anything at all. 

Propose to your child each time they put 10% of their allowance or paycheque into a savings account, you'll allow them to select what's for dinner. You can also give them more time with the television, buy them their favourite dessert, or allow them to forget about chores for a day.

Kids are highly motivated by rewards so use this to their financial advantage.

Looking at credit scores and bank statements can feel frightening. No matter how scary it feels, knowing how much we have and how much we spend is important.

Encourage your kids to regularly count how much they've saved in their piggy bank or bank accounts. Ask them, if they're comfortable, to chat about their recent purchases with you. 

If you have a working teen in your home, encourage them to track their spending by saving receipts and printed bank statements. They can even create budgets each month and adjust their budget each time they spend money.

Share the power of saving with kids even while they're young. Take them to a local store to select their very own piggy bank. 

Tell them to find a piggy bank that makes them happy. They'll be more willing to save their money if they enjoy the vessel that holds it. 

Go with your children that are teenagers to open a bank account. Most banks allow children to open joint bank accounts with their parents.

Setting goals pushes us to do better each day. Inspire your kids to create their own money goals. 

Little kids may express the goal of being able to buy a new toy or game. Tell them to save up. Once they reach their goal, take them to buy the toy.

Is your child in high school? More than likely, they hope to attend college, rent their own apartment, and/or buy their own car one day. Ask them to write down their goals and hang the paper where they can see it each day.

Instilling the value of work into kids is important.

Push your teen children to get a local job at a grocery store or diner, even if it's for minimum wage. You may even tell them that if they want to go out with friends, they have to pay for it themselves. This will encourage them to put in the hours.

For smaller children, create a list of chores. Your children can complete chores in exchange for a few dollars.

Many of us make financial errors when prioritizing our wants over our needs. Encourage your children to not make these same mistakes.

Explain to your children we all need food, water, shelter, and basic clothing to survive. We also have to pay bills for our electricity, cars, and phones. 

Sympathize with them by agreeing that paying for these needs isn't fun, but it helps us remain taken care of in life. The better we are taken care of, the more motivated we are to work and succeed.

The more we succeed, the more we can afford the things we want. Because our wants and needs change as we grow older, it's important to teach financial literacy by age.

At this age, kids should start learning to identify coins and their values. They're also able to use this knowledge in interactive games, such as the imaginary restaurant game mentioned above. 

Questions to present kids within this age range include:

• "What coin is this?" (Ask while showing different coins.)
• "How many cents is this coin worth?"
• "How many cents do we have if we put these 2 coins together?"

Once they understand the value of different coins and bills, introduce kids to the concept of spending and saving. Explain how we spend money to get the things we want, and saving helps us buy bigger and better things.

Questions and challenges to present kids within this age range include:

• Deciding on a low amount they can save each month with allowance money
• Encouraging them to save part of their birthday and holiday money for later
• "How much does the milk (or any other grocery item) cost?"

This is a great age to chat about tracking spending and adjusting budgets. Show your kids how you decide how much to spend on different household items and bills. Teach them about your printed bank statements.

Questions and challenges to present kids within this age range include:

• Creating a dinner budget for the week
• Adding up how much was spent on groceries for dinner and evaluating how that affects the budget
• "Do you know why I use a debit card? Do you know what it is?"

When kids are between the ages of 13 and 15, they're in a prime spot to start creating financial goals. Encourage them to think about the type of job they'll want in a few years, how much money they want to save from the job, and what they want to save up for.

Questions and challenges to present kids within this age range include:

• Creating a list of financial goals
• Chatting about the importance of jobs in relation to financial goals
• "Do you know what credit is? Do you know how to use a credit card?"
• Formulating payment plans to pay you back for larger purchases

This is the age at which kids should start understanding the importance of lifelong financial goals. While they may not be close to having a family or buying a home, it's important they learn how to set themselves up for success.

Questions and challenges to present kids within this age range include:

• "What are long-term investments you'd like to make?"
• "What can you do differently now to meet your long-term goals?"
• Look at household bills and how they're factored into monthly budgets
• Explain the importance of emergency savings and how it helps with repairs and unexpected events