Financial Basics You Can Teach Your Kids
By Mary Lukow, Assistant Manager, Chebanse Facility
It is never too early to teach your kids about finances. Now I’m not advocating that you try to explain how to calculate compounding interest to your 2-year-old. That is not a worthwhile endeavor! However, once you’re past the toddler stage, any child can learn some basic financial principles. Let me share a few examples with you.
The Value of Money. This principle is very basic but kids don’t automatically know it. Often they think that money is just there or that you can get as much as you want or need from the bank. It is important to teach your kids that real money is different than play money. It has a value because it is how we purchase things that we need or want, and it has value because it must be earned. Which brings us to the next principle…
The Value of Hard Work. Kids need to be shown the connection between hard work and the money that enables them to put gas in their car, pay for a movie, or enjoy an ice cream cone. When they do odd jobs around the house for money or get a job mowing a neighbor’s lawn, they can begin to equate their own effort with the reward of cash. Hopefully along the way they will realize that doing a good job is also rewarding in itself.
The Value of Saving. Saving is a habit that is hard to establish – there are just so many opportunities to spend! But a child who learns to save will usually grow up to be an adult who saves. This can be beneficial in many ways. Savers don’t have to use as much credit and are prepared for unexpected expenses. Help your child cultivate a saving mindset and you can help set them on a path toward financial success.
The Value of Giving. As you teach your kids about earning, spending, and saving, don’t neglect to teach them to give. When you encourage your kids to take a little of their money and use it to brighten up someone else’s day (for example, by buying a small gift for a friend or grandparent), they will get to experience firsthand the joy of using their resources to bring joy to others.
These are just a few ideas to get you started. Give it some thought and start teaching your kids about financial principles today.
