By teaching children how to be honest and responsible, you'll be instilling principles that will help them understand finances, money, and budgets. Using life scenarios as financial examples, you can show your children how to make informed financial decisions in adulthood.
Life Lessons: The Well-Rounded Approach to Financial Education
Contrary to what most may believe, the start of financial education begins with the understanding of a few life fundamentals: honesty, responsibility, and gratitude. These principles build knowledge beyond just dollars and cents; it lays the foundation for your child to achieve financial success.
Build a Foundation on Honesty
It’s natural for children to fib from time to time, but teaching them the importance of telling the truth (no matter what), will help them build integrity in their life and in their finances. Having honest conversations with your children about the value of money and why parents may not be able to afford to pay for all the things they want, can help them better understand the concept of earning, saving, and spending. These types of conversations build empowerment that enables your child to be more comfortable financial issues and goals.
Responsibility Beyond Finances
One of the best financial education lessons you can teach your child doesn't have to do with finances at all. Cultivating responsibility in other areas of your child's life such as putting away their toys, feeding a pet, or watering a plant develops traits that can lead to responsible money management habits. For example, you can explain to your child how not putting away toys can lead to them to getting misplaced and replacing them will cost money. Illustrating real life examples of how responsible actions impact finances will teach your child accountability with managing their money.
Our Berenstain Bears Financial Literacy Cub Account is great way for your child to start learning responsible financial concepts such as saving, sharing, spending and earning that will last them a lifetime. The program is designed for children up to age 13, and makes learning about money fun and rewarding!
Gratitude and Its Connection to Wealth
Studies show that practicing gratitude leads to a variety of benefits including higher self-esteem, better relationships, a more positive outlook on life, and better overall happiness. It also indicates that an attitude of gratitude is linked to financial well-being as well as less materialism. When we are grateful, there is less desire to buy more things and makes us appreciate what we already have. You can be a role model for your child by expressing when you're grateful for something, talk about gratitude with them, and ask what they're grateful for.
Encouraging Generosity and Leading by Example
Generosity teaches empathy, sharing, and giving back. Educate your children about the importance of generosity through charitable donations and include them in the giving process as you lead by example and donate. You can encourage them to learn about an organization of their choice where they can volunteer, collect items to donate, or give some of their own money to.
Try this: The next time you're out grabbing groceries or picking up dinner for the family and you pay with your Peach State FCU Visa Debit Card, you can use this opportunity as a simple example to show your child how you help support a cause that gives back locally. Each time you use your Peach State FCU Visa Debit Card, we'll donate a nickel to the Peach State FCU C.A.R.E.S. Foundation which supports non-profits, school systems, and the arts in the communities that we serve.1
This is a great lesson that's about more than just dollars and cents; it teaches children to help others in need.
Practical Strategies for Teaching Financial Responsibility
When it comes to a solid financial education for children, here are some tips to help build their financial responsibility.
- Saving – This is an important thing to teach your children who will otherwise spend frivolously. Learning to delay instant gratification and save for a few months instead is an invaluable life lesson.
- Budgeting – Help your children plan how to spend their allowance or other money. Learning to live within their budget now will set them up for future success.
- Smart Spending – A good financial education includes smart spending. If your children spend all their allowance and ask for more money, deny the request and explain ways they can make better choices in the future. Understanding the cause and effect of their choices will help them learn better spending habits.
- Earning Power – Give children a chance to earn money so that you can teach them how to properly manage it. Getting paid for chores will give them control over their spending and saving habits for a smart money lesson.
- Be a Real-Life Example – Talk about finances with your children. Include them when you donate, talk to them about a purchase you’d like to make but honestly need to save for a few months, or tell them that you put money from your paycheck directly into savings on payday. They will mimic these positive money choices.
Consider these strategies when guiding your child into becoming a responsible human being who’s on the track toward financial success. Financial education is more than just dollars and cents; it’s allowing practical experiences to teach everyday life skills that are crucial for better decision-making in their financial journey.
If you'd like to find more resources and discover new ways to help your child start their financial journey to adulthood, contact us today! We'd love the opportunity to help.
1 $0.05 per transaction of Peach State Federal Credit Union’s merchant interchange income from our Visa Debit Card program is used to benefit the communities we serve. Peach State will determine where/how funds are disbursed. This does not affect members’ accounts, nor will any member information be disclosed. You will not incur any additional fees or charges from this program. Merchant interchange income is derived from fees that a merchant pays to accept credit/debit card payments. The C.A.R.E.S. program may or may not apply to ATM transactions, certain commercial transactions, or other transactions not processed by Visa.
