Financial Literacy for Kids
Here’s what parents should keep in mind.
Key takeaways
✓ Lead by example. Make sure you're being a good money role-model.
✓ Have open conversations about money. Talking about finances can help clarify money for your kids and promote healthy financial habits.
✓ Save for their future. Higher education, like university, can be expensive. It's never too early or too late to start saving.
✓ Don't neglect your future. Remember that saving for your retirement is for you and for your children.
Lead by example
Kids are always watching and learning from you, so make sure you're being a good money role model everyday—like by minding your spending, following a budget, prioritising saving, and being cautious with debt. Simple lessons like teaching your kids the difference between spending on wants and needs can go a long way. Really, anything that involves money can be used as a learning tool to teach financial literacy for kids.
Have open conversations about money
You don't need to share the entirety of your financial situation with your kids, but talking openly about finances can help clarify money for them and help promote healthy financial habits. Consider sharing a financial goal of yours with them, talking about money decisions you've made that you're proud of, or giving them a "budget" when they want something new. These could all be effective ways to teach your kids the value of money and the importance of managing it.
Save for their higher education
Remember that higher education, such as university or trade school, can be incredibly expensive and seems to come quicker than we think it will. It's never too early or too late to start saving.
Different types of savings plan can help you do this. If you can, try to make small monthly contributions, or even automate your contributions. Another idea is to ask relatives to make contributions toward your kids' education plan instead of giving toys at holidays or birthdays. If your kids decide to work before college, you could also offer them some sort of matching program. For example, for every bit they contribute, you will match a certain amount.
Don’t put yourself last
Be sure to protect yourself first when you think about finances. Make sure your retirement accounts are on track before you start funding anyone else's education. If you haven't saved enough for retirement, your kids might end up becoming financially responsible for you. So remember that saving for your retirement is for you and for them.
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