Math and reading skills can go a long way toward a solid financial education.
A growing body of evidence suggests that financial habits are learned by age 7. Support the development of sound financial practices by getting involved in your child’s financial education. We’re not asking you to ask your child to balance your checkbook or manage your credit score. Instead, take an involved role in teaching basic math and reading skills in the context of personal finance. Ready to start? Keep reading to learn more.
1. Read together
Reading together is one way for parents to create a learning environment. Take it a step further by reading books on money-related topics and turn your child’s literacy skills into financial literacy skills.
A variety of books contain money topics that are accessible to young children. Berenstain Bears books are famous for their grade level reading and family stories. Berenstain bear: money problem takes the learning one step further to include the themes of earning money to achieve a goal.
Another popular book, You can’t buy a dinosaur with a penny, makes the case for saving your allowance as main character Pete makes financial decisions. Throughout the story, Pete earns an allowance, saves for a goal, overspends, and learns the importance of financial responsibility.
2. Involve them in races
When it comes to personal finance, learning experiences surround us in our everyday lives. Races are an amazing opportunity to teach math and money skills, as long as you take the steps to get your little ones involved.
Take a grocery trip, for example. Young people can help determine which products on the shelf are the most expensive, learning the value of comparing options. Ask your child how much he thinks the trip will cost. When it comes to paying for groceries, give your child the option to swipe their credit card or pay in exact change. In addition to learning math skills, a trip to the grocery store can provide important context regarding the non-discretionary expenses your family pays each week.
3. Pay a modest stipend
One of the most effective teaching tools you can use to make saving and spending real for your child is to pay a modest allowance for chores well done. Earning leads to saving and eventually spending and, along the way, to learning.
Before you start paying a stipend, set expectations about the amount of the stipend, how often it will be paid, and the terms under which it will be paid. Next, work with your child to set a savings goal to work toward. By earning and saving money, young children can learn the value not only of their household chores and their contributions to a household, but also the value of setting a goal and saving to achieve it.
Allocations can be difficult to track. Use technology, such as the Greenlight app, to help. Paying an allowance is part of cultivating a strong financial education in children. By reading, involving them in errands, and paying an allowance, you can cultivate a solid financial education for your child. It’s a win-win situation.
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