5 Financial Lessons Simplified for Kids
This post may contain affiliate links. Read full disclosure here.
by Possible Finance
When it comes to finances, learning how to manage money is best done at an early age. Gaining an understanding of financial literacy during childhood puts individuals at an advantage when they cross the threshold from teenager to adult. Rather than racing to keep up financially, they’ll enter young adulthood knowing how to manage money. And that’s the first step to a stable and successful future.
As parents, it’s up to us to ensure our kids get the financial education necessary to live economically secure lives. We need to teach them the following five lessons early on — and we need to do it in a way that keeps them engaged in the process.
Lesson One: How to Use Currency
The first financial lesson any child needs to learn is how to understand and use currency. This means knowing how much every coin and bill amounts to, as well as what it can purchase.
For younger kids especially, memorizing and understanding currency can take repetition. That’s why having them match coins and bills to one another can prove a useful activity. This worksheet will help children remember which coin or bill is which. Parents can also take the project a step further and explain what items one might buy with each amount.
Lesson Two: How to Save and Meet Your Goals
As adults begin making and managing money, they’ll eventually set goals for themselves. These goals could include anything from purchasing a home to opening a retirement fund. Such endeavors may seem far off for young kids, but setting objectives for their piggy bank funds may prepare them to leverage their savings later on.
This piggy bank activity has children write down what they’d like to achieve with the money in their piggy bank. By breaking that money up into categories, children can learn to prioritize certain goals over others. They can also realize the importance of saving and what it can do for you in the long run.
Lesson Three: How to Prioritize Necessities
Children can often be impulsive, so prioritizing necessities over luxuries is something you’ll need to drill into their minds. To start, you can clearly separate wants from needs using this activity. As you go through and select which item falls into each category, you can explain why that item is or isn’t essential. Hopefully, this will help them distinguish between the two types of purchases later on.
Lesson Four: How to Build a Good Credit Score
Far too few adults don’t have a proper understanding of what makes a good credit score. This word search activity uses a common children’s game to drill some of the basic credit terminologies into players’ minds. While playing the game, they’re likely to retain some important information about building credit.
Lesson Five: How to Solve Money Problems
Dealing with obstacles such as debt or taxes is inevitable, so it’s best to teach kids to deal with such things early. Problem-solving exercises, like the questions presented in this activity, give kids the opportunity to take what they’ve learned and apply it. If they can do that, they’ll be one step closer to tackling financial problems in the real world.