4 Ways to Help Children Become Fiscally Fit

Financial wellness is a crucial dimension of our overall well-being. But while we grow up learning about the importance of eating right and exercising, many of us may have received different lessons about building healthy finances. As a result, we may have grown up feeling confused or ambivalent about money and trying to figure out how to manage it properly. If you’re concerned about instilling a healthy relationship with money in your children (or the children in your life) and teaching them to use money responsibly, here are four ways to get you started to help your children become fiscally fit.

 

1: Talk about Money

One of the best ways to help children learn how money works is to talk about it. Talking to kids about topics like earning money, saving, budgeting, and paying bills before spending on non-essential things will help them understand the basic costs of living and money management.

Of course, money conversations should be age-appropriate, and parents should avoid sharing financial stress with their children, like concern over bills or debt. Keeping things simple and non-emotional will help teach children about essential finances without creating fears or anxieties around money.

 

2: Establish Family Money Values

Consider establishing family money values to help drive your conversations with your kids. These are basic principles your family can live by when it comes to when and how you spend your money. Some examples could be:

• We pay our bills first, including saving money because we treat our savings account like a bill.
• We press pause and talk with our family about any big purchases, even when we are very excited about them.
• We give money to charity every month because it’s essential to help those less fortunate than us.
• We can use what is left after our bills, groceries, and charitable giving each month for fun things. Remember, it doesn’t have to cost money to have fun!

 

3: Let Children Experience the Value of Real Money

Of course, we need to experience a concept in action to learn. Even young kids can begin experiencing how money works in the real world.  

• Set up an allowance with a “half to spend, half to save” structure so your kids can experience watching their savings grow regularly. Having a particular piggy bank for savings makes this even more exciting! When kids hit a certain amount in their piggy bank, take them to the bank to deposit their savings in their savings account.
• Give your child $10 and a short grocery list and let them “shop” with you. Giving them a money responsibility will help them take on more tangible value when they see how much they can – and cannot – purchase. Let them check out at the cash register so they can experience the person-to-person exchange involved in making a purchase.
• For teenagers and college-aged kids, take time with their first paychecks to explain things like taxes and Social Security. Discuss debt, borrowing, credit scores, and financial aid more seriously.
• Some apps and websites allow you to set up a mock investment portfolio for your child. Utilizing these online resources is a great way to learn about investing for older kids!

 

4: Teach Them Money Is a Tool

Finally, talk about money as a tool. Just like a hammer helps build great things, it can also damage if misused. You can use this analogy to help remove the idea of money as being “good” or “bad.” What a person chooses to do with their money matters most. 

By following these tips on how you can help your children become fiscally fit, they are more likely to reach financial success and achieve overall well-being by the time they’re adults.