Money matters, and money management skills are even more important – at any age. With the help of parents, friends and teachers, children can develop essential financial skills that will be an asset throughout life.
Nearly half of parents believe that schools should teach their children financial literacy, according to the 2010 Intuit Town Hall Money Matters Consumer Survey. However, with cuts to education budgets across the country, teachers often lack the resources they need to impart good financial advice to young ones and many parents don’t have the tools to reinforce lessons at home.
“Today’s economic crisis underscores the need for financial education and the importance of budgeting and planning ahead – life skills that are not necessarily included in the standard American school curriculum,” said Aaron Forth, vice president and general manager for Intuit Personal Finance Group.
Some basic money skills will help your child develop financial literacy and be responsible adults.
Give them some control
If kids don’t have control of money before adulthood, they learn that money will always be provided for them, and tend to then spend liberally when they do have their own money.
To avoid this, give your child some control over the household budget now. If you allot $125 a month for toys and entertainment, let them have complete say in how $30 of it is spent.
They’ll probably end up buying $30 worth of junk in the first week, but eventually they’ll gain an understanding of what’s worth buying and how to make money last longer.
Have fun with finance
Goals and games are great —for adults and kids. They bring out the competitive nature in all of us, even if we’re just competing against our selves. For example, the free personal finance Web site www.Mint.com has capitalized on children’s love of games by teaming up with Scholastic to create a financial literacy game called “Quest for Money.”
Children can choose from a variety of savings goals (a new bike, concert tickets, etc.) and roll the dice to see if they can make wise financial decisions that let them reach their goals.
The site, located at www.mint.com/blog/education, also provides teachers with lesson plans and resources for instilling good money habits.
Control impulse buying
By controlling impulse buying, you teach your kids that patience is the key to good judgment when it comes to financial planning. Establish a 30-day wait rule for all big purchases.
Or have your children make a list of items they need (preferably long before any shopping trip) and keep it in their wallets. Then let them purchase anything on that list when it goes on sale.
And remember to practice what you preach. Example is the best teacher when it comes to money management.