The Importance of Teaching Kids About Money
Teaching kids to be responsible with money is a foundation that will last them the rest of their lives. The basic principles of personal financial management are often neglected in their high school years, which can lead to financial illiteracy as adults. Starting when they are young, you can instill sound financial management skills that will teach the value of money, the benefits of saving, and the importance of being wise with how they spend their money. We’ve put together a list of things you can teach kids now, to get them started off on the right foot.
Money is Earned
This one may seem obvious to most people, but it isn’t always abundantly clear to kids. Teaching children that money doesn’t ‘grow on trees’ may be cliché, but it is a pivotal life lesson. Learning this one simple fact will entirely change the way they view money and how they choose to spend it. When your kids see you go to the ATM and draw money, they can make the wrong assumption that the money comes from a machine. Teaching them that the money is in the bank because mom or dad earned that money at their job, will help them connect the dots between working and money.
Teach Them How to Save
Most consumers aren’t great with saving money, which is unfortunate, because it is a simple concept that can impact the overall quality of life. Help kids learn to be savers by teaching them to save for the things they want, instead of the instant gratification that a $20 bill from your wallet provides. Be a good role model and save yourself! Most Ohioans can’t cover a $500 emergency, and by putting money away for those situations, you can teach kids the importance of being prepared. Most importantly, communicate with them when a big expense pops up and how you were prepared to cover it with your savings. Instilling the value of saving money in children can really help them navigate tough situations later on down the road.
Show Them the Value of Smart Shopping
Learning how to shop smart is an incredibly important skill as well. Many consumers shop impulsively and either buy things they don’t need or overpay when less expensive alternatives are available. Teach kids to be value shoppers and how purchase decisions can affect their ability to save and spend. Simple lessons like this can really make an impression on kids, and forever change the way they think about spending money.
Show the Value of Generosity
Over the course of a child’s life, there will be opportunities to help those who are less fortunate. Studies on giving have shown a connection between generosity and happiness and well-being. Start small with a food drive or a $1 donation at the grocery store for a cause. The most important aspect of generosity to teach them is they have to have money in order to make an impact, which makes saving and smart purchasing decisions even more important.
Be a Good Role Model
Although this is universally a great way to teach your children anything, it’s especially impactful when it comes to teaching them about personal finance. Children often follow in their parents’ footsteps, which makes modeling good financial decisions a key role as a parent or influential adult. Tell them about the times when you were smart with your money and times when you made poor decisions. These building blocks will help them learn from your successes and mistakes and help them make good decisions with their money.
KEMBA Provides Student Bank Accounts
Get your kids started on the right financial path with a youth account at KEMBA. Our youth accounts are designed to help kids learn the basics of managing their money and saving for big purchases in the future. To get started, contact our dedicated local associates to see how KEMBA can help. Call 614.235.2395 and select Option 4 for more information.