Throughout Financial Education Month, you may be accustomed to hearing the importance of teaching money lessons to your children, but you may also be left looking for age-appropriate topics and hands-on lessons.
As a career banker and a proud dad to a teen and a tween, I’ve facilitated my fair share of money conversations both at home and in the classroom on behalf of Hancock Whitney and would like to share a few of the lessons I find most beneficial across various age groups. These relevant topics can help children build a strong financial foundation, and no, you don’t need a career in banking to lead the conversation.
Age: 10 years and younger
Children 10 years old and younger can greatly benefit from a solid introduction to money. For the youngest of kids, learning to accurately identify different bills and coins helps build money confidence.
Put this into action by having your child try to explain the physical differences of various coins and notes. Graduate to playing matching games, encouraging your child to match the correct coin or note to the appropriate value.
For older elementary aged children, consider introducing the concept of other payment methods such as checks, debit and credit cards and discuss how they work and when one might use a check or card instead of cash.
Elementary age is also a key timeframe to introduce the concept of saving. This introduction can be as simple as putting money aside to purchase a souvenir on the next family vacation or the latest video game. Regardless of the end goal, the practical action of saving and watching their money grow will be most beneficial.
Age: 11-14 years
One of my personal favorite topics to teach, both to my own children and to children throughout Baton Rouge where I volunteer with Junior Achievement, is the concept of needs vs. wants. Middle schoolers are beginning to absorb the world around them and see how financial decisions are made, making this a perfect life stage to have them question what is necessary to live versus what might be a wishlist item.
Take the time to identify objects in your daily life and ask children what category they believe it falls into. Use this as an opportunity to discuss essentials for survival – shelter, food and clothing, and nice-to-have items that while serving a need are truly a want, such as the latest fashion, a gourmet meal or a new home.
When assessing needs and wants, encourage your kids to also think about future tradeoffs. If something is a want now and they use their funds, will they be able to cover a need in the future? Or, how will fulfilling a current want impact a longer-term want?
Age 15-18 years
Understanding what a budget is and how to build and follow one is a big deal for high school age students. Many teenagers begin earning money during this phase of their life and therefore begin managing money for the first time. Learning the basics of budgeting, including identifying income and expenses, planning for discretionary spending on fun and learning how to track where money is actually going, can become a life-changing skill your teen will carry with them for years to come. It’s also a vital step in financial goal-setting, another practical skill you can introduce at this age. Work with them to identify their goal—possibly purchasing a vehicle, saving for college, or a post-graduation vacation—then discuss how to reach that goal, breaking up the plan into smaller, more achievable milestones.
One thing to remember is that, like all of us, teenagers are likely to make a money mistake or two. As a parent, take the time to talk through what happened and challenge your teenager to outline a plan to ensure a similar mistake doesn’t happen in the future. Also, don’t forget to celebrate their successes; learning to manage money and make financial decisions is a huge step in financial independence.
Looking for some ways to brush up on your own financial knowledge? Visit Hancock Whitney Financial Cents for Adults for interactive lessons on a number of money management topics.