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BetterLife Magazine - May 2022
More Than a Piggy Bank How to Teach Your Kids to Be Financially Responsible by Beth Muehlenkamp
Dropping coins in a piggy bank and receiving some birthday loot is often how kids first connect with money. While this is a good start, there are many proactive ways you can help kids at any age develop financial literacy. Financial literacy is defined as possessing the knowledge and skills to make informed and effective decisions about money and financial goals. Why is this important? The financial habits kids learn will impact them throughout their lives. One of the most significant concerns Americans have is running out of money in retirement. SRI research found that people who have greater financial knowledge are more likely to save for retirement—regardless of age or household income.* Keep reading for a few easy tips to help your kids become financially responsible.
Preschool and Early Elementary The University of Cambridge found that several basic finance behaviors are developed by age seven, so start teaching your kids early. See the money grow as you fill up a clear jar instead of a concealed piggy bank. In today’s cashless society, it is hard for kids to grasp the value of money or that things cost money. Whenever possible, let your kids see you pay with cash. Even better, let them dump out the jar, count the $5 needed for their purchase, and hand the money over to the cashier. Another great experiential activity is a lemonade stand or bake sale. These small pop-up businesses are chock-full of opportunities to learn everything from finance to marketing to entrepreneurship.
