Teaching Your Children about Financial Literacy (A Three Part Series)

Part 3: Teens…The Final Frontier

The teen years can be a tricky time: as our children are trying to spread their wings and want their independence, parents still have important things to teach.  As much as teens want parents not to tell them what to do, they still need our guidance and support.

By allowing teens to make mistakes, parents help them learn important lessons while the “fallout” is relatively small.  Our job as parents is to provide real life “examples” that teenagers can learn from indirectly, without feeling as if they are being given orders.

In addition to the ideas given in the last post, here are some ideas specifically geared toward teenagers:

• Instead of taking your teen out shopping for school supplies and clothes, load the money you would spend on a pre-paid card, and allow your child to make their own decisions about what they are going to buy.  In our home, the only stipulation we put on spending was that the money had to be used on supplies and clothing.  We also made it clear that they would not receive any additional money.  It was up to them how to spend it.  This is also a great idea for monthly allowances.
• If your teenager is working a part-time job, show them how to check their pay stubs.  Everyone, including employers, makes mistakes and teens need to learn to make sure that they are accurately paid.
• Allow your teenager to plan and organize a yard sale.  Not only will you get your house decluttered, but you will also teach your teen valuable skills such as making change and bartering skills.  If you feel particularly generous, you can even let them keep the proceeds.  
• Talk to your teen about the importance of having an emergency account.  This account is for true emergencies: a blown out tire, a phone dropped in a toilet, a blown out transmission.  A new pair of sneakers at the mall is not an emergency; it is something that to save for.  It may take several months to develop, but for a teenager a good amount to shoot for would be $500-$1000.  
• Talk about the importance of giving with your teenager.  Research five charitable organizations with them, and then pick one that the entire family will support.  This gives them a sense of ownership in where their donations are going.  With this ownership, it becomes more likely that donating money to worthy causes will be a part of their lives into adulthood.

For more information about Calvary University’s Family Literacy Program, check here.

Teaching Your Children about Financial Literacy (A Three Part Series)

Part 2: They are Off to School, but Your Job Continues

When we send our children off to kindergarten, many parents feel that their role as their child’s teacher has ended.  As they walk into that brick building for the first time, we relinquish some of the control to a teacher, to mold and shape their young minds.  However, that does not mean that our jobs of educating our children are complete.

This particularly holds true in the area of financial literacy.  The schools will teach our children the value of coins and how to add and subtract money, but parents need to teach them how to use money.  Here are a few ideas to do with your elementary aged child:

• Give your child an allowance.  Whether it is given with “no strings attached” or attached to completion of chores is widely debated.  The point is children need to have money before they can learn to manage it.  A popular way to do this is to give $1 per year of age per week.  For example, an 8 year old would receive $8 per week in allowance.
• Create jars labeled “Spending,” “Saving,” and “Sharing.”  As a family, decide what percentage of your child’s allowance will go into each jar.  Our children split it this way: 40% spending, 40% saving, and 20% sharing.  This does two things.  One, it teaches your child the importance of saving and sharing.  Two, it begins to teach your child how to budget their money.
• Once your child has at least $20 in their “Saving” jar, take them to the bank to open up a savings account.  Many banks have accounts specifically for children, with special prizes and bonuses.  Your child will have the opportunity to learn to fill out deposit forms and other banking forms.
• Use weekly grocery ads to teach your child about comparison shopping and pricing.  Teach them about price per unit and talk to them about quality vs. quantity.  For example, the store-brand paper towels may be less expensive, but do they work as well as the name brand?  
• Involve your child in planning an event, such as a birthday party or family barbecue.  Allow them to help plan the meal or activity, and teach them to figure in “hidden” costs such as paper goods and transportation costs.

Most of these activities will require minimal effort from the parent, but can reap huge rewards for children as they continue down the path towards financial literacy.  Check back on Monday, June 12 for the final segment of this discussion: helping your teenager with financial literacy.

For more information about Calvary University’s Family Literacy Program, check here.

Teaching Your Children about Financial Literacy (A Three Part Series)

Part 1: The Earlier You Can Start, the Better!

According to Wikipedia, financial literacy is the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it, and how he/she donates it to help others.  These topics are something that many adults could use help with, not to mention the youth of our culture.  

While elementary schools teach money skills in the early grades, parents also need to assume responsibility in teaching their children the value of money, as well as the values that the family attaches to money.  For example, is it important to the family to contribute financially to local charities? Does the family tithe?  Parents are the best ones to teach these values to their children.  

Like many other types of literacy, it is never too early to begin teaching your children financial literacy skills.  Even toddlers can begin to learn some of these basics.  Here are a few ideas to use with your toddler and preschool age children to start building a foundation in financial literacy:

• Take advantage of the times when you are waiting in line with them (at the grocery store or playground) to start talking about how sometimes we have to wait for the things we want.  This becomes the foundation of teaching them to save up for things they want.
• Use everyday interactions to talk to them about needs and wants, how people earn money by going to work, and how you need money in order to buy things that you need and want.  
• Talk to them about how bills and coins have different values.  Play money (purchased at dollar stores or homemade) can be used to play store with your children.  This begins to teach them the basics of commerce.  
• Allow them to use safety scissors and clip coupons for you.  Then, when you are at the grocery store, have them search for the products they have coupons for.
• You can begin to teach them basic economic principles, such as opportunity costs.  For example, you offer them a choice of a granola bar, an apple, baby carrots, or fruit snacks for snack.  They do not like granola bars or carrots, so they automatically say no to those, leaving the apple and the fruit snacks, both of which they enjoy.  They choose the apple and, in doing so, pay the opportunity cost of not being able to have the fruit snacks, which they also like.  

These are just a few ideas of activities you can do with your small children to begin teaching financial literacy skills.  Check back on Thursday, June 8 for suggestions for elementary students!

For more information on Calvary University’s Family Literacy Program, check here.

Developing Literacy Skills from an Early Age

Is it ever too early to begin teaching literacy skills to your child?  Research would say that it is not.  Parents of infants and toddlers are in an excellent position to begin cultivating a love of learning in their children.

When many people hear the term “literacy skills,” they automatically think of reading.  While reading to your child is very important, it is not the only way to begin developing literacy skills with your young child.

One way to help your infant or toddler begin to develop their vocabulary is by simply talking to them throughout the course of their day.  When you are out running errands with them, use rich, descriptive words to describe things to them.  When caught in a rainstorm, describe the “cold, wet raindrops,” the “crashing and booming thunder that sounds far away,” or the “bright white lightening.”  Describe things in as much detail as you can to them to help them start developing their vocabulary.

Rhyming words are essential pre-reading skills, so spend time telling nursery rhymes and singing all kinds of songs to your child.  You can even make up silly words to make you both laugh.  

When you do read books to your infant or toddler, it is a good idea to pick a chunky “board” book or a soft, washable book.  Both are very kid friendly and relatively easy to clean.  Look through the book and talk about the pictures.  Find items in your home that are the same as the items in the book.  

As much as children love to read, there will be times when they will be “done” after only a couple of minutes.  It is perfectly acceptable to stop reading in the middle.  It is best not to force a small child to finish a book so that they continue to think of reading as a positive activity.  

As you are reading to your child, show your child the words.  Run your finger along underneath the words as you read, left to right.  This begins teaching your child the mechanics of reading: that we read top to bottom, left to right.

Finally, as your child gets older and begins to have favorite stories, let them “read” the story to you.  As young as the age of three, children can memorize a story and love to be creative in their storytelling.

For more information about Calvary University’s Family Literacy Program, check here.