Families are spending more time than ever together at home. While this certainly presents its challenges, the opportunities to teach kids life-applicable skills are abundant. Financial literacy is one of those skills that has never been more important or more relevant, and increased time spent with our kids each day presents an opportunity to teach them about money handling and basic concepts that will serve them into adulthood. We’ve rounded up a few exercises that are easy to integrate into daily life, and which reinforce other concepts such as math skills, critical thinking and decision making.
• Counting Cash: This is a simple skill that is increasingly overlooked as society has shifted to credit cards. With less exposure to cash than previous generations, cash-counting skills need to be taught. For younger elementary aged children, third grade and below, use $10 as five $1 bills and one $5 bill. Prompt them to count the cash back to you in different amounts. You can start with $5 then increase the amount they should count back. For older students, use $100 as four $20 bills, one $10 bill, one $5 bill, and five $1 bills. Have them count back different amounts to you using different combinations of the bills provided.
• Small Grocery Budget: Give your child a small budget for a portion of your regular grocery shopping. For example, if you typically spend $10 per week on snacks, give your child a list of snacks they can choose from and charge them with meeting that budget. For younger children, write down prices rounded to whole dollars and have them put together a list based on those prices. Encourage them to utilize coupons, sale items and generic products to enhance the lesson. Aside from simple budgeting, they’ll learn to make responsible choices and to reduce expenses.
• Price Shopping: Ask your child to shop for the best price on a certain item you need to purchase online and give them a few websites to use to search for the item. For older children, be sure to have them include shipping and sales tax in the price comparison. You can add another layer to the lesson if you don’t restrict the item to a specific brand. In that case, encourage your child to read reviews before purchasing and do research to determine which brand is best.
• Allowance: This activity will vary based on your family’s principles and values. An allowance is a great way for students to learn about income and financial decisions. Giving an allowance in exchange for completing assigned chores is a great way to enforce a work ethic and teach children about the exchange of time and money. If your family prefers not to enforce earning an allowance, consider creating a savings challenge in which your child sets a savings goal for an item they’d like to purchase and a date they’d like to purchase it by. Help them calculate how much they will need to save from each allowance payment to meet their savings goal. If you have more than one child, siblings can race against each other to see who meets their savings goal first.
Whether you notice or not, your child is paying attention to your financial situation and will likely model themselves after you. Research has proven that children pick up on money talk as early as preschool; it is truly never too early to start teaching kids about money. Get creative and customize these activities to your child’s age and learning style — over time, these money lessons will form habits that last a lifetime.
Kirsten McDaniel is executive director of Youthentity.