The Importance of Teaching Children About Personal Finance | Richard Banks & Associates, P.C.

Learning how to manage money and finances successfully is a vital part of the growing up process.

Parents can begin teaching their children valuable lessons about money from a young age, making sure the groundwork is laid for financial success down the road.

Financial Lessons Kids Need to Learn

There are many lessons for children to learn as they grow up, but some that can be overlooked occasionally are financial lessons.

Did you know that according to a 2018 survey, it was discovered that only 17 out of 50 states required high school students to take a financial education course? Clearly how to manage personal finance is something that should be taught to all children.

One of the best ways to teach your children about money is through real world experiences.

Are your kids eyeballing a toy or game? Tell them the price and then teach them about budgeting, using their actual allowance. Make sure they know how much to set aside each “payday” and have them figure out how long it will take to buy that toy. This is always an excellent way to teach the value of money.

If you have young kids, a piggy bank may be your idea of teaching them about saving, but per Dave Ramsey, a better idea is to use a clear jar as their “bank.” This helps, because unlike most piggy banks, the jar will help your kids visualize the money they have and how it grows.

Another important thing you should do is limit impulse buys with your child. Kids need to understand that “wants” need to be paid for with hard-earned money, a lesson that can benefit them for life.

Here is an example timeline of financial lessons to teach your child:

Preschool/Kindergarten: Introduce the concept of money—what different coins and bills are, how money is used, etc.

Elementary School: This is the ideal time to teach your child about saving money.

Middle School: You should take your child to the bank and set up his or her first savings account.

High School: This is the perfect time to teach your child about budgeting and borrowing money, especially as the college years are fast approaching.

You can serve as a model for your children in the financial realm, especially since they are always watching and imitating what they see. Filing for bankruptcy is never an easy choice, but it can serve as another important lesson for your children as they grow up—knowing how to make better money decisions to prevent financial stress in life.

Looking to get your finances back on track so you can provide your children with the right example? Richard Banks & Associates is ready and waiting to help you work through bankruptcy.