They say that money makes the world go ’round, and while the validity of that statement is a matter of opinion, no one can deny that money is important, which means that it’s also important that parents teach their kids to be financially responsible.
“Financial literacy is a life skill that we all need,” says Kathy Jamieson, the Career Exploration, Workforce Preparation, Entrepreneurship and Money Management Educator at the Michigan State University Extension Center in Clinton Township. “Parents really are the individuals who kids look up to and that’s where a majority of kids learn their financial habits, so what better place than in the home?”
Of course, talking about money with kids can be a bit of a challenge, especially if you don’t know where to start. So we asked Jamieson what parents should know about starting these lessons.
Where to begin?
Believe it or not, it is never too early to start having financial lessons with your children. In fact, Jamieson says that you can start as soon as your child recognizes what a coin is.
“(Parents) can start these lessons real young, just by playing with money,” she explains. “Young kids can start to grasp that information and as they get older you can start getting into more complex issues.”
For preschool-aged kids, she suggests that mom and dad start out by playing grocery store or bank with their kids. They can also discuss costs of the products that they see on TV commercials or read a book about money with their kids.
“There’s a lot of books that have stories about money,” Jamieson adds. “For instance, Alexander Who Used to be Rich Last Sunday, Lemonade in the Winter or Those Shoes, there’s just a ton of books out there about money.”
As the child gets older, parents can introduce their children to more complex money issues by playing games such as Monopoly or Pay Day, bringing their child along to the grocery store, clipping coupons together or explaining sales receipts.
And if your child is responsible enough, you can even start them a savings account and have conversations about investing.
“Encourage them to talk about how much money to put in the saving account and have conversations about what they want to save, or possibly even invest,” Jamieson says. “Talk about compound interest, talk to them about what a CD is and have them buy some stock to watch. The key is to make the learning fun and hands-on with them.”
Macomb County programs
Parents can take their money lessons one step further by utilizing the many free financial literacy programs offered by Macomb County’s 4-H clubs and the MSU Extension Center.
Among these programs is the Show Your Money Smarts Contest, which is now in its third year and teaches kids about avoiding fraud, predatory lending and identity theft, along with recognizing scams.
Kids who join the contest watch webinars and take 30 question quiz. Five winners are selected to become Youth Ambassadors who can then share their knowledge with their peers.
In addition, “the first place winner has an option of getting $1,000 toward their savings plan or a smaller amount in cash,” Jamieson adds. “And that’s a lesson in and of itself: Should I withstand my want for money now or save it for later and get more?”
Another program, the Reality Fair happens via Zoom on April 28, 2021, and offers teens a hands-on simulation where they pick a job title and create a budget to live by based on what the job makes.
“I really, really encourage parents to involve their kids in these small ways because the kids are looking to the parents and that’s where most young people learn about financial education,” Jamieson says. “Have those conversations, do those games, read them a book because that’s where they’re learning it from and the more you can be involved, the better they’ll be in the long run.”
Follow Metro Parent on Instagram.