Financial literacy means understanding how money works in the world: how to earn, manage, save, invest, and donate it. This is a vital skill to have, and it’s my job as a parent to teach my kids how to manage money and credit so they don’t stumble into financial disaster in adulthood. As adults we have (hopefully!) learned to postpone gratification. We’ve learned to weigh wants versus needs, current wishes against future needs, and make thoughtful decisions about how we balance those things. Disciplined saving is one of my personal values and something I want to instill in my kids. Especially in these times, there is a lot of merit to saving up a nest egg for a rainy day.
Role Model Financial Literacy
I want my girls to learn to be financially responsible, which means I need to do the same. When I want to purchase a big item, I try to avoid buying on credit and save up for it instead. Another way I keep on track is through automatic saving. Every month, a specified amount is automatically withdrawn from my chequing account and deposited into my RRSP and into my children’s RESP. Every little bit, no matter how small, adds to our savings. And through the magic of compound interest, those small amounts make a big difference down the line. That’s how I’m saving for my future, and for my children’s futures.
Explain Money Decisions
I don’t necessarily talk dimes and nickels, but when it comes up naturally I try to explain why I’m making the financial decisions I’m making. For example, when Tee asks for a new toy, I remind her of all the toys she already has. I ask her, “If we spent all our money on toys, how would we buy food?” Very simple I know, but it helps to plant the seed that every financial decision is a trade off: if we spend our money here, we won’t have the option to spend it there.
Let Your Children Practice Saving
Encourage your kids to save at least some of the money that comes into their possession. Both my girls received personalized piggy banks at their naming ceremonies, and their birthday money and the money from their Chinese New Year red envelopes goes straight in there. Tee is very proud of how much she’s managed to save over the last couple of years. I’ve used this as an opportunity to start teaching her the names and values of the different coins.
Let Your Children Practice Spending
The flipside of saving is teaching them how to spend their money too. Let them take two or three or five dollars out of their piggy bank and head to their favourite store. Here’s where they get to figure out what their money is actually worth.
“Mommy! Mommy! Can I get that super duper annoying, loud, and ultra unnecessary toy of the week?”
“Well, let’s see how much money you have. Is this enough to buy it?”
“No…”
“Well then I guess you’ll need to keep saving or find something else you can afford.”
I coach Tee through the transaction from beginning to end to help her learn how to navigate the checkout process. Of course this is best kept for when there isn’t anybody waiting behind you in line!
Win an Amazon Gift Card!
How do you teach your children financial literacy and the value of a dollar? To help get the discussion going, I’ve got a giveaway here for a $25 Amazon gift card. Enter to win in the Rafflecopter widget below. This giveaway is open to residents of Canada, 18+. All entries will be verified. Check out my other open giveaways listed over in the right sidebar! a Rafflecopter giveaway Disclosure: This is a sponsored conversation. All opinions expressed are completely honest and my own. Your experience may differ.
I usually end up buying stuff on amazon that I can’t find anywhere else!!! Probably books 🙂
I would use it to buy books
Good Morning, If I were so lucky to win I would like to spend this gift card on books for my granddaughter.
I would buy Christmas presents. Probably something for my husband like one of their boxed movie sets. Great value!
I have compiled over the last couple of years a wish list of books that I would love to own and I would spend this if I won on a couple of books
If I won the gift card I would spend it on a pocket diaper!
I would spend the gift card on cute little baking tools to get my daughter helping me more in the kitchen
I would put this gift card toward an item on my husband’s Amazon wish list if I win.
I would buy some ebooks
I’d let the kids spend the gift card. Making them divide the total and figure out how much each could spend. Making it into a math lesson. And then letting each pick out a book or something.
I would probably use the gc to buy a gift for my kids.
My kids would really like the next DVD installment of the “Dragons: Defenders of Berk” show. It’s their fave right now esp. with the second movie just being released as well.
I’d love to buy the movie Avatar
like to use to buy books
I would spend it on books
I would love a slow cooker, or some ebooks
I would spend the money on books for my grandchildren – thanks!
I’d to buy my son some dustless chalk and some Bible stories for 2 year olds.
I would use the gift card to buy my boys books. I seem to be able to limit the amount of toys in my home but can’t stop collecting all the great books out there!
I would use it towards buying a kindle for my son.
Thanks so much.
I would spend on books for our teens.
I’d love to put it towards a camera I’m saving for!!
A camera!~
Anything for our little girl. Amazing how fast they grow out of stuff!!
I would use it toward the Disney Infinity game for my son for Christmas
I love this post. A solid financial understanding is such an important part of life yet there is pretty much no practical education on it in schools. The girls will be so much better off in years to come because of the time you are taking to make sure they understand now.
When I was a kid my mom always made sure I had a swear jar in the house to ensure people wouldn’t swear around me. It was a large old wooden clock with a glass front that my dad had emptied out and cut a whole in the back for coins. When the coins were dropped in it would make the old clock coils chime so I always made sure to collect! By the time I was 4 it was full of coins and bills (big thank you to my parents friends!) so we sat down and counted it up together and it was just over $400. That day my mom made an appointment with the branch manager at her bank and when we went in they sat me down and explained how interest works. They let me choose (with guidance) what to do with the money and it ended up in a locked 7 year GIC at a great rate. Over 30 years later I still remember that meeting and it has shaped my life… probably more than my mom could ever have guessed at the time. The lessons you teach your kids today may just have a bigger impact than you can imagine, well done!
Thanks, Kristy! What an awesome story! And holy cow they must have sworn like truckers – $400 in 1980 dollars? That’s like crazy money! I hope you did something special with that money when the GIC matured. 🙂
If I won the gift card I would spend it on black computer ink.
I’d use it toward a new pair of running shoes.
If I won I would put it towards either some books or a new slow cooker. I would probably wait to see what I get for Christmas and decide from there.
I would use it to buy my sister a birthday gift.
I would spend it on my dog’s pill pockets. He gets many per day and they are really expensive!
I’d use the Amazon gift code for Valor essential oil.
thank you
An oops just realized this is for Canada.
What would you like to spend this gift card on?
most likely dvds thanks
A good way to teach your children is opening a bank account and by giving them an allowance so they learn the value of money. They have to deposit part of the allowance in their bank account.
I would by books on Amazon.
use jars for your children to categorize their saving/spending.
I think lead by example is the best way to teach your children about financial literacy.
i would spend this on plays
I would use it to buy Christmas presents
I would spend it on Christmas.
There’s a Melissa and Doug activity table that is on my wishlist for my son. I’d use the giftcard towards that for his birthday
I would get one of the many books on my list.
i let them learn with an allowance
I would like to spend this card on books.
I would put the money towards a light fixture for my kitchen remodel.
I would use the card to buy a present for myself, a new book or toothbrush.
If I were to win, I’d like to spend the Amazon card on some books I’ve been wanting.
Cheers.
If I win, I’d spend the $25 Amazon gc on books I’ve been wanting to read.
books for sure. thanks
i would use the card towards something for the family, a new movies, some books…
I would buy a couple books for myself! I love new books & there are a few bestselling titles I’ve got my eye on.