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Teaching your kids about money

November 26, 2014

Here’s a great idea

“In today’s increasingly complex world, financial literacy is more important than ever.  Children learn about money from their parents. Start your child on the road to financial success by talking to her about good money management.”   Laura Connerly, Ph.D.

In other words

Fees and disclosure statements, mortgage loans, credit scores – financial products are not always easy to understand.  How can we help our children grow into smart consumers?

As a parent, you are your child’s first and most important source of information about financial management.  Be intentional about teaching good money management skills.  Involve your child in conversations about finances. When talking to your kids about money; remember to have a positive attitude, use age-appropriate concepts, and encourage responsibility.

How this applies to you

Here are some important concepts to discuss with your budding consumer. Income and Expenses – Your child doesn’t have to know exactly what you make or owe; but they need to have a general understanding of the main sources of family income and the main expenditures.  Needs vs. Wants – “Needs” are the things that are necessary for survival such as food, shelter, and clothing.  Most other items are “wants”.  Pay for needs before you buy wants. Spend, Save, Share – These are the basic components of a good budget.  The rule of thumb is to spend 80%, save 10%, and share 10%.

To find out more

Watch Dr. Connerly’s Kids & Money video at: http://www.youtube.com/watch?v=VSfcV-K8fbQ&feature=youtu.be

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