It may not seem like it, but kids are always watching and learning. If you are an adult with a child, teenager, or young adult in your life, you are passing down money management habits whether you realize it or not. While money may seem like a topic reserved for older kids, it is important to remember young children also pick up on adults’ money management strategies. In fact, children begin to pick up on these concepts around the age of three. The Consumer Financial Protection Bureau points to three building blocks that help children develop important skills, like financial management, as they grow:
- Executive function. This helps kids plan, remember, multitask, problem-solve, and control impulses. These abilities start to develop around age three and continue to build throughout childhood.
- Habits and values. These make take the form of standards, shortcuts, routines, and rules that are used to navigate daily activities, including financial activities. Habits and values develop early in life.
- Decision-making skills. These are based on knowledge and familiarity with concepts like research and analysis. Teenagers often have several opportunities to practice financial decision-making skills.
Helping kids develop these building blocks prepares them for many skills that are useful in adulthood, but teaching new skills may not be easy, so where can you start? University of Minnesota Extension suggests a consistent approach. Is there more than one adult in the household? If so, first try discussing your own feelings and opinions about money. Each adults’ experiences, values, and beliefs about money are likely different. By doing this, you can establish a consistent approach to teaching the kids in your life about money. Not sure where to begin? University of Minnesota Extension suggests these conversation starters:
- What are our values and attitudes about money that the children may be observing?
- What do we communicate about money?
- How will we structure learning experiences about money?
- How will we respond to the effects of advertising and peer pressure on our children's buying requests?
Once a consistent teaching approach is established, it will likely be much easier to educate the kids in your life about money concepts like earning, spending, saving, borrowing, and sharing.
As many adults have recently helped transitioned the kids in their life to different forms of online learning and have taken on more educational responsibilities in the process, most are probably aware this is not an easy task - teaching kids can be difficult, yet rewarding. If you are not sure where to start with teaching money concepts, here are a few suggestions adapted from University of Wisconsin-Madison Extension:
- Use a piggy bank or set up a bank account for the child. This will help with the concepts of earning and saving.
- Let kids buy small items if they have the money. Allowing a child to buy something small teaches them about the concept of spending.
- Create conversations about everyday occurrences. For example, explain where cash comes from when going to the ATM or making a purchase.
- Explain how needs and wants effect what you buy. In doing this, you can potentially teach the entire range of money concepts.
- Practice math skills. Counting dollar bills or coins will help teach both money and math concepts.
- Help kids set small money goals. For example, help set a goal for buying a new book and make a plan to reach that goal.
- Help kids compare choices. As an adult, you may routinely do this but teaching kids to compare items will help build their decision-making skills.
Teaching these concepts and skills provides an opportunity to spend some quality time with the kids in your life and helps prepare them to navigate their adult lives. However, even as an adult prepared with these skills, times can be tough. Ohio State University Extension Wayne County offers Money 101, a free educational series designed for anyone wanting to increase their financial stability. The upcoming October series will be held online on Monday evenings. Attend the series of four classes and be eligible for our free Master Money Mentor program. Call the Extension office at 330-264-8722 for more details.
Sara Meeks is an OSU Extension Family & Consumer Sciences Program Assistant and may be reached at 330-264-8722.
CFAES provides research and related educational programs to clientele on a nondiscriminatory basis. For more information, visit cfaesdiversity.osu.edu.