Daily Dupaco

Tuesday, August 01, 2017

Teaching your kids to become financially literate

It won’t be long before another school year begins.

But lessons don’t just happen in the classroom—especially when it comes to financial literacy.

While money doesn’t buy happiness, a lack of it can cause its share of stress. So, how can parents impart financial wisdom to their children before they leave the nest?

Consider these tips provided by Dupaco Community Credit Union’s Melissa King:

Don’t wait

You can start teaching your child money basics—like the three principles save, spend and share—at any age. These smart money habits don’t come naturally.

“There’s a misconception that they can be too young to understand,” King says. “But they’re watching you, and perception is everything. If we’re going through life swiping our cards and talking about money with others, they’re thinking about it.”

Lean on your village

The African proverb “It takes a village to raise a child” applies to teaching financial literacy too.

King has noticed more schools partnering with parents to talk to kids about money.

“Sometimes as the parent you feel like the Lone Ranger,” King says. “You can teach them how to save, spend and share. But how often are they always listening to us? It’s so important for parents and schools to partner together.”

Make it fun, and make it visual

Teaching kids about money is a lot easier when you make it fun along the way.

King has volunteered for Junior Achievement, which works to give young people the knowledge and skills they need to own their economic success. When teaching younger children what money is worth, the organization lets kids feel real money and practice budgeting by shopping in a mock grocery store.

“They make it real to the kids,” King says. “Visuals are so helpful.”

Parents can do this too. When you’re at the store, occasionally take time to point out why you’re buying one product over another. Talk about, and compare, the prices.

“When you’re at the grocery store with children, the last thing you want to do is have a lesson on saving in the fruit aisle,” King says. “But the little lessons do add up.”

With older kids, let them sit with you while you’re on Shine Online Banking. They can watch you pay your bills and see how much you budget for groceries and cell phones.

“It becomes more of a reality for them to see how much their parents are spending and how much things cost,” King says.

Explain the why

“So many times as parents, we tell our kids what to do. We say, ‘Brush your teeth,’ and we just repeat ourselves,” King says. “But we need to take it a step further and ask, ‘Why do you need to brush your teeth?’”

The same goes for money matters. It’s important for children to have their own savings account, but it’s just as important that they know about it and why they have it, King says.

“When we go into classrooms for Junior Achievement and ask kids if they have a savings account, they’re wishy-washy,” King says. “Some say yes, and some are puzzled.”

When you talk to your kids about the importance of sharing money, show them how their contributions will help others.

Keep the education going

Treat financial literacy like any other subject.

“Kids practice their spelling and math every night,” King says. “We also have to implement that knowledge of money and finances all through their life. It’s that constant repetition.”

Learn from others

King says she learns from Dupaco members every day. Whenever possible, she likes to pass along their knowledge to fellow members.

Here are two lessons that have stayed with King:

  • 50/50 split: One member’s daughter was a frequent babysitter. Every time she babysat, her father took half her earnings and let her do what she pleased with her half. This continued for years. As the daughter prepared to move away from home, the father wanted to know what she had to show for her earnings. She had a cell phone—and nothing else. Then he explained how he had saved $8,000 for her with the half he kept. “He taught me so much,” King says. “He allowed her to make decisions with her own money, but as her parent, he was also in control of some of that money. If he hadn’t done that, she would have had nothing to show for all of her babysitting.”
  • Save half: Another member worked for her dad, sweeping the shop and filing papers. Her dad made her save half of every paycheck. “Now she’s in the workforce and still saving 50 percent of what she earns,” King says. “Her dad taught her at a young age to live within her means.”

By Emily Kittle

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