Most of us use money every day, and it strongly shapes the course of our lives. It’s a little mystifying, then, that we don’t discuss it more with our children, says Scott Bacon, assistant director of the Center for Economic Education and Entrepreneurship (CEEE) at the University of Delaware.
Parents might be embarrassed to discuss trouble with bills or limited income, he posits. “[But] we’re doing a disservice to not teach them.”
Start kids early, even if they can’t grasp all the nuances of compound interest or capital gains tax.
“Little kids grow up to be big adults [who] don’t know how to save money or do finances,” warns Michelle Suchyj, a teacher at the Bancroft School in Wilmington. “The earlier we start, the more interest they have, the more excited they will be.”
Begin with the basics. “It’s a building block, a scaffolding that really makes the vocabulary much easier to absorb and learn as they get older,” explains Gail Colbert, CEEE’s personal finance coordinator.
Kindergartners might start with discussions about saving, spending, and choices. As they get older, they can tackle budgeting, investing, and career topics, and then eventually move on to detailed explanations of credit, car loans, taxes, student loans, economics, and financial planning.
Here’s how to get the conversation going:
A Penny Saved Is a Penny Earned
Suchyj encourages parents not to just give children money. Instead, have them earn it for chores, so they’ll learn its value.
This can also work with money you’d already spend, she notes. For example, if your child needs $5 for a school field trip, have them do a task to earn that amount rather than just doling it out.
One challenge, points out Liles Puleo, a second grade teacher at Marshall Elementary in Newark, is that few people use cash anymore, so children can’t watch and learn how money works. Instead, they see their parents make mysterious transactions with a plastic card.
“The more we use something other than physical cash to pay for something, that concept becomes more and more abstract,” she explains. To make it concrete, Puleo talks with her students about bartering.
But don’t dismiss the value of new digital technologies. Kids need to learn to navigate the modern financial system, and there are learning opportunities all around us, Bacon notes. Children already know about PayPal and Venmo because they see their parents using the apps.
A Budget Tells Us What We Can Afford
When parents put limits on their kids’ income and spending, children learn that they can’t have everything they want—a preview of the adult world, Suchyj says.
Talk to your kids about priorities, or necessities like food and clothing, as well as less urgent needs, like toys and other forms of entertainment. Bacon notes that even high-priority items like food come with choices—lobster or tuna fish?
Kids should devise a basic budget with their parents or teachers, reviewing their income, figuring out how much to save, and choosing how to spend wisely.
Carla Lawson, a high school social studies teacher in the Caesar Rodney district, has her students consider potential careers and their salaries, and then walks them through a budget based on that salary. She often finds that students have not thought about this aspect of their future.
They’ve Got Game
When it comes to investment topics, young kids might have more sophisticated abilities than you’d think. Each year, teams from schools around the state, starting in fourth grade, compete in CEEE’s Stock Market Game. They pick stocks and follow their gains and losses in a simulated setting. Throughout the process, they absorb lessons on the benefits and risks.
“The whole purpose of financial literacy and economics education is decision-making,” Bacon says, which encompasses understanding choices and consequences.
Teaching your kids about money is not about raising the next Wall Street tycoon but rather about making sure they understand the ways money can impact their lives.
Money Matters
Intentional conversations about how our system of money works might be difficult for parents who don’t have a solid foundation of knowledge themselves. Fortunately, there’s help.
- The Council for Economic Education’s Family Financial Fun Pack is available at councilforeconed.org/programs/for-families.
- The Stock Market Game isn’t just for schools—parents can sign up to play with their kids at stockmarketgame.org.
- Delaware Community Reinvestment Action Council’s Money School offers free classes for adults, taught in multiple languages by financial experts: demoneyschool.org.
- The Consumer Financial Protection Bureau provides advice and resources for parents at consumerfinance.gov/consumer-tools/money-as-you-grow.
Related: Delaware Tech Is Joining the Metallica Scholars Initiative
