We all hope to provide younger generations with the education and skills they’ll need in life, and financial literacy is a part of this. There are things we can do to teach concepts related to money – modeling and discussing responsible financial choices should be at the top of the list. Here are some ways to increase your child’s financial knowledge.
Although the subject is sensitive in some households, children can’t learn about managing money if it is never discussed. For example, giving your children weekly allowances in exchange for doing chores provides them with the opportunity to spend, save, and make decisions for themselves while learning money isn’t free. Assigning chores is a great way for them to learn this valuable life lesson. Other opportunities to discuss money with Gen Z is by taking shopping trips to the grocery or department store. They can learn about making choices based on price, quality, preference, and value.
Let everyone in the family participate in creating a budget. Make a family financial mission statement, seeking input from everyone. Teach the difference between wants and needs, and help them set up separate piggy banks for spending, giving, and saving. It’s a good idea to open a BankSouth savings account for them, and when it’s age-appropriate, teach them about interest and investing. Going over the monthly statements together is a great way to teach how interest can accumulate over time.
Find games that involve using money, such as Monopoly or Life, or even playing store, so they learn the concept of paying for an item and play for fun, rather than real money. Let them help you clip coupons or search online for promo codes, and make your shopping list. At the store, you can show them how to compare prices, and take advantage of sales. Make it a point to have conversations about positive money experiences, so it’s not a frightening topic.
Financial matters involved with home ownership can be taught as they come up in everyday life. Teach the concepts of mortgages, interest, insurance, and property taxes as you go through the process yourself as an adult. As children grow, you can also demonstrate how property values are assessed and how the amount of tax due is calculated.
Once your child understands the concept of earning money, you can have some conversations about starting and running a business or starting a career. Although it takes time for anyone to be at a point where starting a business is a possibility, learning the concepts involved will be very beneficial for them. Talk about the common concepts of starting small, acquiring capital, and ways to raise it for a business – such as crowdfunding, applying for loans, using savings, or finding angel investors.
Making mistakes with money is a great way to learn. No generation is exempt from making money mistakes and learning from them. It can be tempting to jump in and try to prevent your child from making an unwise choice, but allowing them to make their own mistakes (within reason) is part of the process of learning how to manage money. You can gently ask questions about how they are making their decisions. It’s important to let them know that nobody makes perfect choices all the time and that you too, have made financial mistakes that you learned from.
When shopping, you can ask which brands they think are better choices, and why. When planning the family vacation, be sure to ask what things are most important to them and get their input on selecting a place to stay, comparing costs, and budgeting for the trip. You may find that your Gen Z tweens and teens can offer you valuable assistance, as well as accountability, particularly in tasks involving digital banking and online resources.
Some parents are uncomfortable talking about money with their children, but pushing through this discomfort is critical. Allowing the younger generation to learn from your own daily money management tasks will stick with them far longer than a classroom lesson. Teaching your children financial skills is important. The lessons they learn in this area will provide the basis for their financial decisions for their entire lives.
Georgia residents across the state have trusted BankSouth for over 75 years. We are proud to help younger generations start and manage their finances responsibly. Whether it’s for starting an online checking account, starting a business, or planning to build a house, BankSouth has and will be here for you.
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