Teach Children About MoneyBill Field2016-12-23T12:57:50-08:00
Teach Children about Money (Tips 6 through 10)
If you’re like most people, you wish you had received a professional-level financial education when you were younger. Money management skills might have saved you from past (or current) financial worry. Although technology won’t allow us to travel back in time, you can teach children about money. Our youth are counting on you to share money management knowledge that can help them avoid the common financial pitfalls that so many people find themselves in today.
Many parents and teachers feel uncomfortable teaching children about money. NFEC has conducted surveys with parents and educators, indicating that the top reasons for not teaching children about money are lack of confidence about the subject matter, feeling uncomfortable talking to kids about money, lack of guidance, and not knowing how to start a conversation. For these reasons many parents and teachers never teach children about money—kids are left to figure out the world of personal finances on their own, often with disastrous consequences.
This article will help you feel comfortable talking to children about money. Follow the personal finance for kids tips and pick up your complimentary gift, “Family Money Talks.”
Tip 6: Compounding Interest
Want to give a kid hope of achieving their lifestyle and financial goals? Spend 10 minutes online playing around with a compounding interest calculator. The discovery that saving just $100 a month can make them millionaires gets youth excited. This is a powerful activity, especially when combined with the first tip – relating money to lifestyle goals.
Tip 7: Credit
Two of the most common financial pitfalls for college students are debt and credit issues. The two topics are inter-related, and essential to cover when teaching kids about money. Building good credit can save children hundreds of thousands of dollars over their lifetimes. Take time now to explain how to build good credit. The NFEC encourages all youth to take a professional-level course on credit in addition to the other essential personal finance topics.
Tip 8: Lemmings vs. Free Thinkers
People are influenced by marketing. Whether messages are delivered by advertisers or politicians, most people lack capability to evaluate the truth behind persuasive messages. When you go shopping or watch TV with your children, point out the advertisements and critique them together. What are they trying to sell? Who are they targeting? What actions are they trying to get you to take? This analysis can help children evaluate advertisements logically instead of emotionally. You will begin to raise free thinkers—not lemmings.
Tip 9: Investing
Encourage children early to learn about investing. Children or students might spend 30 minutes a week learning about the stock market, real estate, and entrepreneurship. Take your children with you the next time you meet with your financial advisor, insurance agent, or tax preparer. Let them learn in ways they enjoy: YouTube, magazines, TV programs, newspapers, and talking with experts are all viable ways to learn about money.
Tip 10: Encourage Entrepreneurship
Encourage your child to start a business, something that doesn’t require a significant financial investment. Their first businesses will probably be skill builders rather than multi-million-dollar ideas; but starting a business forms a valuable building block for future endeavors. What’s more, kids will pick up personal finance skills and knowledge along the way.
Teaching children about money gives them a head start toward a successful future. Get started now, and your kids will thank you for a lifetime.