Parents work hard to set their children up for success, and teaching kids about money is another way to help them get ahead in life. This can be wrapped into your everyday MilLife and can be a fun bonding experience for the family.
It’s important to start teaching your kids about finances early and continue to do so as they grow up. Talk to them often about money management, make it fun and model the behavior you want them to learn and continue throughout their lives.
The more you talk to your kids about money management, the more likely it is that it will become a practice they are likely to continue. Investing, saving, budgeting, credit and debt are among the financial literacy concepts you want your children to be able to talk about easily. The right time to chat about money is now.
When talking with your kids about money, remember to have a positive attitude. Ask questions and listen to their answers. Talk with them on their level, but not down to them.
- Watch this video together about kids answering questions about finances. Have your own conversation with your kids covering similar questions to see where they are in their knowledge of finances. Then you will know where to start building their money concepts and skills.
- Start a conversation at the dinner table. Have the family think of a goal such as taking a vacation, adopting a pet or purchasing a new board game and then talk about ways everyone can help save money toward reaching that goal. Create a plan together and check in weekly to see how everyone is doing.
- Discuss having them do chores for allowance. Open this discussion up to them as a way they can earn money to put toward something they want. Use it as a way, from the beginning, to teach them how much to save and how much to spend from each “paycheck.”
- Narrate your decisions about what money you are going to spend while grocery shopping. Talk about the budget on the way to the store. Involve your kids in the decision-making process by showing them the value of money when it comes to finding sales. Have them help you figure out which are the best deals.
- Explore ways to generate money that fit the age and maturity of your child or teen. Find things they enjoy doing that might translate to earning money. Talk about things such as work ethic, how to apply for a job and how to interview for one. Examples include mowing lawns, babysitting, selling crafts online and having bake sales. Remember to look for opportunities in areas such as online businesses that can be as mobile as the military life.
- Help teens learn how to manage money early by setting a clothing budget for them. Show them ways to save money by shopping for sales so they can purchase that one brand-name item they’ve been wanting. By sharing the tricks you’ve learned and helping them save enough to buy something they want, you can help make the lesson stick with them.
- Start a prom and homecoming budget in the summer. Make a budget together. Have your teen think of all the things they want to purchase for each dance ─ including flowers, dinner, clothing and accessories. Research prices together and let them determine what needs to be cut from the want list or give them ideas on how they can earn extra money to be able to afford more.
- Teach your teen about taxes. Your teenager’s first job is a good opportunity to introduce your teen to taxes. Show your teen how to fill out a W-4 – the Employee’s Withholding Certificate that informs the employer how much federal income tax to withhold from their pay. Talk about how those taxes help pay for essentials like roads, bridges and a strong military.
It’s easy to forget how we became financially literate. Teaching your kids these skills will help them establish good habits for their future earning, saving, investing and spending. It’s never too early to start setting short- and long-term financial goals.
Help ensure your kids remember a lesson by making it fun. Here are some ideas on how to spice things up:
- Snuggle up with your youngster and read or watch video books by checking out BookFlix in the Morale, Welfare and Recreation Digital Library. Find more books to share together from the Consumer Financial Protection Bureau’s Money As You Grow Bookshelf.
- Research cars with your teen by accessing the MWR Digital Library’s Consumer Reports and determine which models to look for. Discuss everything from your budget and their earnings toward it to the pros and cons of buying new versus used.
- Play related board games or create your own games. Put prices on your kids’ toys and help them learn to count money and purchase things. Practice making choices if there isn’t enough money for everything they want to buy. Talk about wants versus needs.
- Get apps for young children, preteens and teenagers that teach kids about money. As a family, look for the Department of Defense’s mobile application, Sen$e, to help you explore financial topics together.
- Find activities to do with your kids that teach money skills.
- Sell stuff at a yard sale. Motivate your kids to clean their rooms with the promise that they can keep the money they earn from selling things they no longer use. Depending on their age/ability, they can help add purchase amounts, count money, give change and bag items. Taking personal responsibility for things helps lessons become part of who they are.
Continue to learn about money management and look for ways to improve your own skills so you are modeling behaviors you want your children to learn. Kids watch and learn from everything we do. Build your financial management skills with tips from the Office of Financial Readiness, MilSpouse Money Mission and the MWR Digital Library.
The longer your kids have to practice skills such as budgeting, saving and smart investing, the more likely they are to continue those good habits throughout their adult lives.