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The Road to Responsible Spending: Teaching Your Kids About Money

THE ROAD to Responsible Spending Teaching Your Kids About Money Money, spending, and saving can be difficult concepts for children to understand and not all children are exposed to financial literacy in school. Parents aren't always sure when or how to start talking about money with their kids, but they can make learning about money fun, while also building a foundation of good financial skills that are vital to a child's successful future. AGES 3-5 • Only 22 states require a high school course in economics • Only 17 states require a high school course in Personal Finance • A mere 5 percent of students claim to have learned at this age about money from an educator. parents should: • Start preparing children to save money for purchases. • Start teaching children about basic banking functions. kids: • Can understand patience and saving money versus spending. Start learning numbers and counting. When they get their allowance, help them put it in a piggy bank, Assign your children small, daily chores and agree to a weekly "allowance" for their hard work. Take your child to the store and tell them they can pick out one thing. Talk counting it together about the pros and cons of each item they would like to buy and help them make a decision to pick just one item. Play store with fake money, pretending to buy and sell goods. Children at this age won't be able to grasp Learn to identify money by playing matching games with bills and complex financial concepts, but working with them now will set each week. coins. the stage for later. AGES 6-8 at this age parents should: kids: • Can add and subtract. Begin teaching basic money concepts such as earning money, spending habits, paying bills, making purchases, etc. Begin logical thinking. School-age Y Create Save, Spend, Give jars, goal for something shopping. Let them difference between and divide up all of their money received from chores or gifts into each of these categories. 8 Take them 8 Talk about the Help them understand that we have to work to Have them set a children can begin to they would like to purchase. Then help them figure out how much they need to save each month in order to reach that goal. choose items, talk about your budget, and discuss ways that you try to save money, such as using coupons and buying generic brands. wants and needs, giving examples and discussing choices while you're in the store. understand that earn money. Talk about what they want to be when they grow up and give them details about your job. money is finite and that it's important for your family to make smart financial choices. AGES 9-12 High school graduates from states that require personal finance education have higher savings rates and net worth. at this age parents should: • Teach children about taxes, inflation, interest, loans, and time horizon. kids: Start applying learned skills. • Begin abstract thinking. Y Explain how debit and credit cards work, emphasizing that it's money that is coming out of your bank account or money that you will have to pay back. Have a garage sale and let your child help determine the value of the objects for pricing, and let them keep the money from the sale of their old items. Ywhen shopping, discuss why you are choosing certain items, particularly when it comes to quality. Teach them how to research the items they want to buy and how to make informed decisions. Older kids Take them to the bank and let them can begin to understand the importance of earning money and making long-term goals. open a savings account. AGES 13-15 is a great resource for teaching kids to use the stock market via gaming - and they can graduate to using real money! at this age parents should: teens: • Help teens understand that their financial choices will affect their future and can begin teaching them about the stock market and more advanced financial topics. • Have improved reasoning skills and are better at understanding abstract ideas. • Understand cause and effect. Teenagers can begin to take on additional responsibility and begin making some of their Begin discussing ways they can earn extra money such as babysitting, mowing lawns, etc. Talk about ways to Teach them about the Help them set up a monthly budget for all of their expenses and save money on the things they want such as using coupons, buying vintage, etc. stock market. Ask them to choose a stock and talk about its ups and downs in price. compare it to their monthly income. own financial decisions. AGES 16 & UP Students from states where a financial education course was required are more likely to display positive financial behaviors and dispositions. at this age parents should: • Prepare their teen for a solid financial future. teens: • Are influenced by their peers and develop mature relationships. • Seek control over their lives and increased independence. (FINANCE As your teens move into adulthood, they will face some major financial decisions such as Help them understand the importance of maintaining a job for consistent income. Discuss the importance of credit scores and using credit cards responsibly. Consider getting them a prepaid credit card or open up a basic checking account to acclimate them to using plastic. Start researching college and the expected costs. For more financial tips for high school and college students, visit www. comparecards. com/financeu paying for college, building their credit, budgeting, paying bills, and more. For more information on how to teach your kids about money and for fun activities and printables, visit CompareCards' Education Center at Choose Wisely Resources: Forbes, Council for Economic Education, The Wall Street Journal, CNN Money,,, Centers for Disease Control and Prevention, FDIC.

The Road to Responsible Spending: Teaching Your Kids About Money

shared by CompareCards on Apr 22
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It’s important for parents to step in and help educate their children since they aren’t always exposed to financial education in school. Parents aren’t always sure when or how to start talking t...





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