In the News

July 01, 2008

Ways To Help Your Child Become Financially Literate

Research continues to show that the younger you start educating your child about managing money, the better. This practice will likely enable them to make informed financial decisions as an adult. Naturally, there are several ways to do this. Encouraging your child to save as much as possible, avoid credit-card debt, and stick to a budget are among the most obvious. But what specific instances can you give them as an example to be successful at doing so?

• Involve your child, especially those who are teenaged, in family budgeting and spending decisions. This can teach them how to save in regular, everyday situations. Sharing information with your child about the expenditures of day-to-day life will not only give them a realistic concept of what things cost, but how to budget their money.
• Educate yourself as a parent about the inner workings of credit cards, and how to handle them responsibly. Passing on financial knowledge about the responsibilities of owning a credit card to your child, especially those who are college bound, can save them from being among the ever-increasing number of college graduates with astounding credit card debt.
• Encourage your child to stop, pause and reflect before purchasing an item. This helps to reverse the habit of impulsive buying.
• Ask your child to visualize the benefits of saving, sometimes by making a list of the items they wish to purchase.
• Have your child save money from allowance and gifts. Acquiring such habits will encourage long-term financial accountability.

Teaching your child to save, spend, donate and invest their money wisely is invaluable, and there is no one more influential to their knowledge of money management than you, as a parent.

Source: U.S. News & World Report

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