At Futures Academy, we are constantly researching and sharing relevant topics that affect our students and families. We also have guest bloggers sharing their research and best practices. Read our blogs to learn more!
Statistics show that only about 57 percent of U.S. adults are financially literate. As a parent, you want your child to develop the necessary skills to manage their money and make smart financial decisions. This will help them overcome financial problems and difficulties later in life, effectively contributing to their financial wellbeing. We all have different levels of financial literacy. The good news is that you can always help your child to increase their financial knowledge and skills.
Here are some tips to help you get started.
Only 33 percent of members of Gen Z feel prepared to manage their money. Financial literacy education for your children will require that you discuss wants and needs with them. You should also teach them how to set financial goals. When your child asks for video games, sporting equipment or toys, encourage them to save their money to pay for part of the cost. Remember to reward them when they stick to their plan and make smart money decisions.
In addition to talking about money and basic finances, it is also important to offer practical lessons. Consider starting your kids off with an allowance, and encourage them to manage it wisely until the next allowance day. This means that they should be careful not to run out of money during the specified period. Regardless of the amount you give, emphasize the importance of managing it so that it lasts.
If you give your kids an allowance regularly, they should understand the consequences of their financial decisions. Find simple ways to teach them to think in terms of choices, alternatives and consequences. Financial reflection will enable the young ones to determine whether they can actually afford an item before spending money. It will also encourage them to assess and improve their financial decisions regularly.
It goes without saying that your children are likely to follow your example. One way to help increase their financial literacy is to adopt and consistently practice healthy money management habits. Be a good financial role model by moderating your extreme money tendencies, encouraging saving with a matching program and using cash instead of credit. The lessons your kids learn by observing how you handle money will benefit them in the future.
It is important to get your child involved in day-to-day family finances from an early age. Whether it is getting paid to complete chores, helping to set up the household budget, trips to the grocery store or bringing the young ones to the bank with you, these activities can present amazing teaching opportunities. The lessons learnt will provide them with hands-on experience that will go a long way in increasing their financial literacy.
Teaching financial literacy does not have to be boring. Using money games to teach kids about money will help to introduce some fun to the process. Board games like monopoly and other relevant mobile games will reinforce the lessons you have been teaching. Playing the games as a family will also provide an opportunity to teach more lessons.
To ensure your children grow into financially savvy adults, you need to provide age-appropriate lessons. Once your kids have a basic understanding of money and financial management, you should consider increasing the complexity of the lessons and giving them some independence. This will prepare them to handle more complex financial issues in the future.
Looking to help your children learn the value of a dollar? Futures Academy is an accredited private school that specializes in an innovative and student centric education model focused on one-to-one instruction. We are committed to helping students become successful as they continue on to higher education. Contact us today to learn what sets us apart.