Aka Ekene, PBA Journalism MenteeHey, have you ever had that moment when your teenager is constantly asking for money or your pre-teen thinks money just grows on trees? Yeah, I know we’ve all been there. But have you ever stopped to think about how that might affect their financial literacy when they’re on their own? Or maybe you’re already seeing it play out in your grown children who have to move back home. It’s like the revolving door syndrome, am I right?
Five majors reason parents struggle to teach their kids financial literacy
It’s not just us, though. A lot of parents struggle with teaching their kids financial literacy. Sometimes we don’t think they’re ready to learn, other times we’re not sure how to approach the subject, and let’s be real, sometimes we don’t even understand it ourselves. But after doing some research, I’ve found there are at least five major reasons for this:
- We don’t give them opportunities to earn money
- We don’t teach them how to budget
- We give them too much freedom with credit cards
- We don’t stress the importance of saving
- We ignore the value of investing
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Remember when your kids were little and they made those cute chore charts? They were so excited to do them, but then it became too much work and they lost interest. Sound familiar? But, like many of us, we didn’t stop giving them allowances even when the chores weren’t getting done. This is a crucial step in teaching kids that they need to work to make money. Once they understand that, they can start learning how to take care of their money and make it work for them. This is where we introduce budgeting and make it fun by using different containers for different parts of the budget like spending money, saving for something special, and money for investing. Teaching financial literacy can be fun for kids.
As our babies become teenagers, we sometimes give them “grown-up” privileges without thinking it through, like giving them a credit card. This can be a double-edged sword if we don’t make sure they understand that credit cards aren’t free money and have to be paid back from the budget. And let’s be real, saving can be tough for anyone, but it’s especially hard for kids if they don’t have something specific to save for. But we can make it more fun by setting goals like saving for a family vacation or other special events.
When they reach driving age, they might want to save for their first car and this is a great opportunity to teach them the value of buying a used car instead of a new one. This can also influence their decision-making when it comes to buying their first home. They’ll learn that it’s better to buy a starter home instead of going deep into debt for something bigger.
Investing is also an important part of the budget and can be a powerful tool in making money grow. Savings accounts can be interest-earning and investing can be an incentive for kids as they see their money grow. It’s a valuable lesson for adults too, as it’s easy to put off investing when we’re young, but before you know it, it’s time to buy a bigger house, car or retire, and that’s when smart investments pay off.
Now that we know some of the best ways to help our kids understand financial literacy, the question is how do we present this information in a way that’s interesting and engaging for them? It’s all about getting creative and finding ways to make it fun and interactive. I’d love to hear your ideas and plans, so feel free to share them with me in the comments section below! Have Fun And Goodluck!
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