Parents in America are wondering whether their kids are ready to make important financial decisions in their daily life. Financial literacy becomes a crucial topic to discuss between parents and youths. Understanding the role of money, being able to save from early age, and choosing an appropriate retirement plan are among the benefits of being financially literate. That is why most financial advisers would suggest parents to teach it to their pre-teens.
How to Teach Pre-Teens Financial Literacy
The first place for kids to learn financial literacy is home. There, parents have crucial role in teaching the kids about finance and building a smart financial foundation for them. Learning finance is not necessarily boring if it is done under an appropriate environment. No formal class is necessary. The following are some tips on how to teach your kids about financial matters:
Involve the kids in financial conversations
Your kids might ask you why you go to work every day. This is actually the right time to explain about the reasons, including financial aspect. Tell them the truth that you have to earn money to buy anything, to pay their educational fees, to buy them toys and games, and many more. This is also the time for you to explain that there may be times, when you cannot afford to buy all the things they ask for. This way, the kids may be able to appreciate what you do for them.
Take them to the bank
Ask you kids not only to the ATM, but also to the bank teller. Tell them what a bank account is and what you get from saving money in the bank. Just let them see how you make a financial transaction in the bank. Whether it is a deposit or withdrawal transaction, the kids will learn how it affects the bank account.
Visiting a brick-and-mortar bank office is suggested if you want to teach financial literacy to your kids. Then, when they understand how banking actually works, it is fine to show them how online financial transaction works.
Pay them for Household Works
In traditional communities, it might sound awkward to see some families pay their kids for helping the parents to do domestic chores. Actually, paying the kids after doing household chores is a smart way to teach the kids about choices and responsibility. Let them know that they have to do something before earning money. If they want to buy something, let them find the ways to earn money for it. This way, the kids will learn to appreciate even small amount of money and to spend it in an appropriate way.
Besides paying them for doing domestic chores, you may appreciate them in another way. The point is teaching your kids about financial literacy from the smallest things. Even if you had enough financial resources, do not show the kids that you do not have any financial problems.
Lack of respect to money is a danger faced by modern parents from their kids. Therefore, teaching financial literacy since the very early age is a good step. When the kids are financially literate, they will be responsible for every decisions they make later in life.