Teaching Your Children about Financial Literacy (A Three Part Series)
Part 1: The Earlier You Can Start, the Better!
According to Wikipedia, financial literacy is the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it, and how he/she donates it to help others. These topics are something that many adults could use help with, not to mention the youth of our culture.
While elementary schools teach money skills in the early grades, parents also need to assume responsibility in teaching their children the value of money, as well as the values that the family attaches to money. For example, is it important to the family to contribute financially to local charities? Does the family tithe? Parents are the best ones to teach these values to their children.
Like many other types of literacy, it is never too early to begin teaching your children financial literacy skills. Even toddlers can begin to learn some of these basics. Here are a few ideas to use with your toddler and preschool age children to start building a foundation in financial literacy:
- Take advantage of the times when you are waiting in line with them (at the grocery store or playground) to start talking about how sometimes we have to wait for the things we want. This becomes the foundation of teaching them to save up for things they want.
- Use everyday interactions to talk to them about needs and wants, how people earn money by going to work, and how you need money in order to buy things that you need and want.
- Talk to them about how bills and coins have different values. Play money (purchased at dollar stores or homemade) can be used to play store with your children. This begins to teach them the basics of commerce.
- Allow them to use safety scissors and clip coupons for you. Then, when you are at the grocery store, have them search for the products they have coupons for.
- You can begin to teach them basic economic principles, such as opportunity costs. For example, you offer them a choice of a granola bar, an apple, baby carrots, or fruit snacks for snack. They do not like granola bars or carrots, so they automatically say no to those, leaving the apple and the fruit snacks, both of which they enjoy. They choose the apple and, in doing so, pay the opportunity cost of not being able to have the fruit snacks, which they also like.
These are just a few ideas of activities you can do with your small children to begin teaching financial literacy skills. Check back on Thursday, June 8 for suggestions for elementary students!
For more information on Calvary University’s Family Literacy Program, check here.