April 17, 2023
Tagged As: Personal
April is Financial Literacy Month, a time for people of all ages to brush up on their money smarts and develop strategies to tackle their finances. But for kids, these lessons are particularly important – because building financial knowledge now can give them the confidence to make smart decisions about their money in the future.
Financial literacy might not seem like the most interesting topic for kids, particularly those in elementary school who don’t yet have the freedom to explore and shop as they wish. But there are a few ways to teach kids about money that are both educational and enjoyable.
Start a conversation
By making the topic of money relevant to your child’s interest, you’ll find it much easier to have an engaging conversation about it.
Try asking questions such as:
- If you could have anything in the world, what would it be?
- Can you think of things you like to do that you don’t need money for?
- Do you feel like your friends encourage you to buy things, or do you ever feel jealous of the things they have?
- How much money do you think a vacation costs?
- If you had to pay money to watch your favorite TV show or movie, how much would you be willing to pay?
- Can you guess how much our family dinner from this restaurant costs?
- Would you do extra chores for extra allowance money?
- What’s your favorite possession?
Bringing up these sorts of questions with children can feel taboo to some parents. But you might be surprised at how your child reacts to being “in the know” on these topics – it can make them feel empowered and respected that you trust them enough to talk about this information, which can make them more receptive to these types of conversations in the future.
Use an allowance as a teaching tool
There are different viewpoints on allowance, but one of the pros is that an allowance offers a way for kids to learn what they can and can’t do with their money. It may also help them understand the reward that comes with hard work. If your child has a tendency to immediately spend their allowance on sweets or other short-term pleasures, it might be time for a lesson in saving.
Through saving, kids learn that they don’t have to wait until the holidays or their birthday to get the new game, toy, or gift they’ve been wanting all year. And by helping them connect their allowance to those much-anticipated items, you’ll help your child understand the value of saving.
Of course, when you’re seven years old, sometimes it’s hard to muster the willpower to forgo your favorite candy for a future toy. That’s where a bank account can come in handy. Make a trip to the bank with your child and set up a savings account to keep their money safe.
At Hills Bank, our Penny Saver accounts for kids under 11 earn interest – so you get a great opportunity to explain how the bank pays people back for helping them save their money. And with regular “penny grabs,” your child gets to add cash to their account at no cost. It’s a great way to make visiting the bank fun, and a first step toward smart saving habits that can last a lifetime.