Most parents understand the importance of talking about money with their kids so let’s look at the following to How to Help Your Kids Build Lifelong Financial Fitness.
According to data crunched by Next Gen Personal Finance, 61% of kids say they speak regularly with their parents about spending and saving.
For their part, 73% of parents say they have regular money conversations with their kids. The source of the discrepancy isn’t clear, but the fact remains that money is an ongoing topic of discussion in most households.
Talking about money and teaching about money are not exactly the same thing, however.
Parents can understand perfectly well that kids need basic financial literacy skills to thrive in the real world while failing to impart those skills in any sort of lasting way.
They tell kids how to manage money without actually showing them.
That, in turn, does nothing to empower them to take charge of their own finances when they’re ready.
Fortunately, financial empowerment can be a fun way to bring kids and parents closer together.
These six financial empowerment strategies work well for kids of all ages. Parents just might learn a thing or two from them as well.
Use a Financial Fitness App
Anchor your in-home personal finance curriculum with a kid-friendly financial fitness app that teaches lifelong money management skills in a way that actually sticks.
You have no shortage of options. One building buzz in financially savvy parenting circles is Goalswell, a gamified financial fitness solution that recently closed a funding round led by Andrew Nikou of OpenGate Capital.
Goalswell makes money lessons fun — and does so without all the extra bells and whistles that weigh down some other family-oriented personal finance apps.
Tie Allowance to Specific Chores or Jobs
Whether you’re using a custodial personal finance app or doling out pay the old-fashioned way (in cash), be sure to tie your kid’s allowance to specific jobs around the house.
These can be one-off gigs, like cleaning out the garage, or recurring to-do’s, like mowing the lawn.
As long as the pay is market-based and the jobs age-appropriate, this goes a long way to teach the value of a dollar.
Teach Kids to Balance a Checkbook (Yes, Really)
Now that most of us bank online, balancing a checkbook is something of a lost art.
And yet this simple exercise is still the best way to help younger kids apply the arithmetic skills they’re just mastering in a very practical way.
Think of it as a win-win: a visual aid to impart sensible spending and saving habits and a sneaky way to get in some extra math reps.
Open a Custodial Bank Account Early On
Cash is convenient, but a full-fledged bank account is better.
Use your money transfer app of choice to deposit allowance and odd-job payments into the account.
Later, when your kid is old enough to work out of the home, help them set up direct deposit.
In the meantime, get them comfortable with the bank’s online and mobile banking interfaces.
Open a Custodial Investment Account or Paper Trading Account
No, don’t give them the keys to your brokerage account.
But do hold their hand as they experiment with basic securities trading strategies, either with small amounts of their own money or through a risk-free paper trading platform.
They’ll need to know how to navigate the market eventually.
Involve Older Kids in Household Financial Decisions
You might artfully describe this as “taking counsel” from your teenager on household financial decisions.
Without giving them final say on anything, you’re giving them a peek at the process.
This is especially important for decisions that affect them, and decisions that they participate in that also happen to have a financial dimension — like which colleges to apply to.
Financial Fitness: A Lifelong Skill
Like most other skills, financial fitness requires regular practice.
Much as we’d all like to check out and not think about money for a year or two, that probably wouldn’t be a great move in the long run.
Those of us fortunate enough to have a strong base of financial knowledge find it easier to stay on top of our finances day in and day out.
More importantly, we take joy in it — or at the very least don’t mind doing it.
Even if personal finance doesn’t come naturally to you — maybe because your parents didn’t take a proactive approach to financial literacy education at home — you can still set your kids up for lifelong financial fitness.
Download a financial fitness app. Teach your kids to balance a checkbook and trade stocks.
Involve older children in household financial decisions without giving them the final say.
Odds are, your kids will enjoy these activities in the moment. And it’s all but certain they’ll thank you later for taking the time now.
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