Back to School: 3 Financial Lessons to Teach Your Kids This Year
by Maurie Backman | Published on Sept. 26, 2021
While your children are busy learning science and arithmetic, take the opportunity to impart some financial wisdom.
My children started school in early September, and one of the things I like about our district is that the teachers send home a questionnaire at the start of the year asking what we, as parents, would like to see our kids learn.
Now obviously the intent here is to be reasonable, so if I were to write, "I'd love for my six-year-old to learn how to clone a sheep," I'd be laughed at or ignored. But one thing I did suggest is teaching some personal finance lessons throughout the year (and even volunteered to help in that regard).
However, parents can't always rely on their children's schools to teach their kids about personal finances. That's why I make a point to show my children what managing money is all about. If your goal is to raise financially savvy kids, too, here are three lessons worth imparting.
1. How to budget
My younger children don't quite understand what a budget is, but my fourth grader not only knows what it means to budget, but has actually seen my household budget. At this point, he understands why we can only afford to spend so much money on leisure and activities (hello, mortgage payment and sky-high property taxes), and he recognizes the importance of knowing how your money is being spent month after month.
If you want to teach your kids about budgeting but don't feel comfortable sharing the details of your actual finances, create a mock budget. That will at least give your children a sense of what it means to set one up and follow one.
2. How to save
My children are privy to a small amount of money via allowance handouts and tooth fairy visits. Also, they all have savings accounts where they keep their money when they're not using it.
I've made it clear to my children that money is theirs and they can spend it as they want. All they need to do is ask me or my husband to withdraw some money from their savings (or, what generally happens is we just give them the cash and pay ourselves back from their accounts).
But I've also explained that if they keep spending their limited money on things like ice cream store visits, stickers, and Pokemon cards, they won't have much (or any) left to buy longer-lasting items, like video games. And that message has gotten through, because all of my children are currently saving up for bigger-ticket purchases.
Now if I'm being honest, these are all things my husband and I would be happy to give them as holiday gifts. But I specifically want my children to go through the motions of meeting a savings goal, so we're encouraging them to keep socking their money away.
3. How to comparison shop
My children used to complain when I didn't buy their favorite granola bar or cereal brand -- until they realized why I often switch things up. Before the pandemic, I used to take my kids shopping at the store and show them the difference in costs between comparable items and brands. Now, they understand that I'll buy a different version because it's less expensive.
These days, I admittedly try to keep my children out of the supermarket as much as I can due to health concerns. But if we're looking for items online, I'll show them the price differences so they understand the importance of researching purchases before completing them.
Unfortunately, personal finance is not a guaranteed fixture in the classroom. So it's on us, as parents, to set our kids on the right path. Now that the school year is back in full swing, it wouldn't hurt to spend some time teaching your kids important financial concepts.
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