:max_bytes(150000):strip_icc()/GettyImages-1451142446-867876aab2494ece8e011bb107898008.jpg?w=1200&resize=1200,0&ssl=1 "How I talk to clients about teaching elementary school students about finances")
Despite that of America ranked number one economy in the world, many students complete their education without understanding basic financial concepts. Terms such as ‘credit recovery’ and ‘debt consolidation’ have become commonplace in the financial sector. To prevent these problems, it is crucial to introduce children to essential topics such as investing, credit, insurance, real estate and taxes at an early age so that they can play a positive role in our financial system later in life.
According to Intuit’s Financial Education survey, most high school students today rely on their parents for financial literacy. Therefore, it is primarily up to parents to teach financial knowledge; the younger the better. Below I discuss engaging ways to teach elementary students about finances.
Key Takeaways
- To build strong financial literacy, introduce basic financial concepts such as saving, investing, credit and budgeting to children aged six and up.
- Involve children in family financial discussions, such as income, budget and expenses, to help them understand the value of money and the impact of financial decisions.
- Use resources like the Federal Reserve’s free materials and financial apps to teach kids about money management and investing in a fun, practical way.
What I tell my customers
A crucial misconception that parents make is that they do not share the family’s financial situation and goals and do not provide educational resources. Sharing the family income, budget, investments and debts makes the subject of money more recognizable.
Use tools to your advantage
Previous generations suffered from a lack of information and access to education, while today’s generations suffer from information overload and don’t know where to start. I encourage parents to contact their state treasurer or Federal Reserve regional offices to find free and fun sources to teach your children. Many brokers offer paper trading, which allows buying and selling securities without using real money. This is a great way for children to understand the concept of buying and selling securities.
Tip
Many brokers offer paper trading, which allows buying and selling securities without using real money.
Involve your primary school students in family finances
Involving primary school students from the age of six in family finances is critical to their financial literacy and understanding. Parents should do that discuss family income, budget, savings, insurance, investmentsand expenses. This helps children understand the value of money, the importance of making informed decisions and the consequences of financial choices.
For middle school children, introducing topics such as savings, investing, credit, real estate and charity can encourage them to think about money. When paying allowancesmatch the child’s contributions to his or her savings and take the opportunity to explain interest rate and employer 401(k) matching. Find a community they love for a good cause and volunteer or donate.
When they reach their teenage years, consider apps like Cash App, Robinhoodand banking apps that help you spend, save and invest.
The bottom line
Addressing financial literacy early is essential to prevent future financial problems. By integrating personal financial education into school curricula and involving children in family budgeting, we prepare them for real-world financial responsibilities. With these efforts, we can equip the next generation with the knowledge and confidence to navigate the complexities of personal finance, fostering a more financially literate society.