3 Highlights: The Balance - 14 Ways to Teach Kids About Money!
To raise awareness on the importance of financial literacy education, we are highlighting and reviewing articles on teaching children about money. We will share a few thoughts on 3 points from each column that HOP off the page to us. We would be delighted to share one or two of your thoughts as well. So, let us know what you think.
Today, we review 14 Ways to Teach Kids About Money by Madison Dupaix, for The Balance.
Here are three highlights from the article.
HIGLIGHT ONE
Each of the following three sentences from the article's conclusion is a bullseye. I could not agree more.
...Kids will follow your lead. If you complain and stress about money in front of them, they will internalize this and have their own issues with money when they get older. Remember that kids are constantly observing adult behavior and building their habits and worldview around your actions...
We have shared it before and will share it again, kids are learning machines! Reference my review of personal finance author and radio show host Dave Ramsey's article, 15 Ways to Teach Children About Money. See comments in Highlight Two.
This is an excellent related read form Psych Central: Modeling Behavior for Children Has Long-Lasting Effects.
Order Today!HIGLIGHT TWO
...Open a savings account: Explain to kids how compound interest works and show them how their money grows...
Love it. My two strong suggestions and additions to this guidance are for parents to: (1) get kids (and themselves) in the habit of saving! And, (2) execute on personal finance author David Bach's mantra - "Make it automatic!"
Opening a savings account is a great first step in getting your kids on the road to more financial security, stability, freedom and wellness. However, if you or your children are not contributing regularly to your account, you diminish the strategy's value.
Do everything you can to help kids while they are young, real young, to form the right money habits. Everything includes sharing the importance of saving regularly, taking them on trips to the bank, reviewing statements together, and offering incentives to save, like, matching a portion of their deposits.
As Sammy Rabbit teaches and says, Saving is a great and life transforming habit!
HIGLIGHT THREE
...Introduce taxes: Kids will often be surprised by the withholding on their first paycheck. Explain the concept of taxes early on and their paycheck will meet their expectations...
Taxes play a big role in our lives. The role is bigger than many realize when one considers and lists all the various forms of taxes we are required to pay. Income. Sales. Employment. Gas. Phone. Utilities.
There is old saying a penny saved is a penny earned. That probably needs to be updated to align with current tax regulations. For many, a penny saved today is more like two pennies earned. Taxes are a big factor in that calculation.
One fun way to begin teaching kids about taxes is to have them predict the dollar amount of taxes on consumer purchases or restaurant tabs.
This is a strategy college student and State President of California Phi Beta Lambda, Inc., Dillon Johnson, shared his parents used with his family. See: The 1 Money Habit You Must Teach Your Children.
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