Tips on Teaching Your Children About Finances

— Written By and last updated by

How children use money will affect not only their economic stability and security throughout life, but also how they live and feel about their lives. Parents and other adults can help children learn about and develop money management skills by discussing money with them, planning together and providing children with positive learning experiences.

Parents and caregivers can begin to develop children’s money management skills by:

  • Guiding and supervising money choices rather than directing and dictating how money is saved and spent.
  • Praising rather than criticizing, complimenting their positive efforts, and not being overly critical of mistakes because making mistakes is a part of the learning process.
  • Letting children learn from mistakes as well as successes. Discuss mistakes and share ways to improve money management in the future.
  • Being consistent, fair and willing to listen.
  • Conducting a family meeting regularly to discuss money issues and agree on short-term and long-term financial goals.
  • Demonstrating a balance of spending, saving and sharing family income.

When talking to young children from ages 4 to 8 about money, consider the following:

  • Help young children learn the value of money.
  • Allow a child to choose between two or three items in making a purchase. Providing an opportunity for choice and making decisions is important, but limit the number of items to choose.
  • Take a child shopping with you and help him or her pay for one item.

When talking to adolescent children from ages 9 to 13 about money, consider the following:

  • Discuss the importance of saving and using money wisely. Open a savings account for your child at a local bank or credit union if this has not been done. Many banks and credit unions have special savings accounts for children that provide incentives.
  • Give your child a small, regular allowance. Plan together how to save this money and make spending decisions.
  • Let children have the experience of buying and paying for something that they want to help in learning the value of money.
  • Work together to plan a budget based on their available money. Discuss financial goals and the need for budgets to guide money decisions.

When talking with teens from ages 14 to 18 about money, consider the following:

  • Discuss practices for earning and saving money and setting both short-term and long-term goals that are important to them.
  • Provide guidance on planning and budgeting, managing checking and savings accounts, using credit and keeping financial goals. Open and manage a checking account and include regular meetings to discuss budgets and money decisions. Use a budget to track income and expenses and progress toward financial goals. Teach teens the real costs of credit.
  • Help teens learn about the purposes, services and charges or fees associated with banks, credit unions, loan companies and other financial institutions.
  • Help teens be aware of spending patterns that might lead to overspending.

The consequences of how children learn about and manage money are vitally important for their life, happiness and future. Managing money well allows them to distinguish between wants and needs, learn how to save and budget, and make wise spending decisions.

For more information or classes on financial literacy, call Shameca Battle at 336-641-2415 or by email at shameca_battle@ncsu.edu. Shameca Battle is a Family and Consumer Sciences Agent with N.C. Cooperative Extension.

Source: eXtension

ABOUT N.C. COOPERATIVE EXTENSION

N.C. Cooperative Extension is a strategic partnership of NC State Extension, The Cooperative Extension Program at N.C. A&T State University, USDA’s National Institute of Food and Agriculture (USDA-NIFA), and local governments statewide.

Extension professionals in all 100 counties and with the Eastern Band of Cherokee Indians connect millions of North Carolinians with research-based information and technology from NC State and N.C. A&T. Educational programs specialize in agriculture, food and nutrition, 4-H youth development, community development and the environment.

Find your local center

NC State University and N.C. A&T State University are collectively committed to positive action to secure equal opportunity and prohibit discrimination and harassment regardless of age, color, disability, family and marital status, gender identity, genetic information, national origin, political beliefs, race, religion, sex (including pregnancy), sexual orientation and veteran status. NC State, N.C. A&T, U.S. Department of Agriculture, and local governments cooperating.

For accommodations for persons with disabilities, contact Mignon Sheppard at (336) 641-2421 no later than five business days before the event. Para informarse sobre adaptaciones para personas con discapacidades, comuníquese con Mignon Sheppard al (336) 641-2421, no más tarde de cinco días antes del evento.

Click Link for printable version:  2018_Shameca_Tips on teaching finance_Article

Written By

Photo of Shameca Battle, N.C. Cooperative ExtensionShameca BattleExtension Agent, Family and Consumer Sciences (336) 641-2415 shameca_battle@ncsu.eduGuilford County, North Carolina
Updated on Jun 22, 2018
Was the information on this page helpful? Yes check No close
Scannable QR Code to Access Electronic Version This page can also be accessed from: go.ncsu.edu/readext?518089