How to teach finances to young people

Elaine King

They teach us many things in school. School curriculums are filled with math, language arts and history. But a common debate is how little they teach us about finances. For example, did they teach you how to open a bank account in school? Did they teach you how to fill out a withdrawal form? Did they teach you the importance of saving money?

Some lucky people have parents who took it upon themselves to teach their children about finances. I'm an example, since my parents were young and organizing their finances was essential. My dad used to say to me, “Here's your allowance. Why don't you save some of it rather than spending it all?” And that's how I gradually learned the value of money and the impact that it could have with a little bit of delayed gratification.

The lack of interest in the subject is the reason why we find the following statistics in the United States:

  • Only 59% of young adults – between the ages of 18 and 29 - pay their bills on time each month.
  • Only 50% of those who closely monitor their finances say that they learned about personal finances from their parents.
  • Only 34% can balance a checkbook
  • Financial bankruptcies in 18-24 year-olds increased by 96% in 10 years.
  • About 70% of college students say that their parents are their main source of information, but less than half of them say that their parents make a conscious effort to consistently give them a Financial Education.

If you are a parent and you're reading this, perhaps you can now understand the importance of giving your children a financial education from the earliest stages of their lives. Now that we understand what the problem is and why it exists, we need to know how to fix it. Here are some ideas:

  • YOU ARE THE EXAMPLE: To be able to give your children a good financial education, you must be the example! Children absorb the examples you set like a sponge, so teach them how you save and let know them how you manage to buy the things that you've saved a lot of money for. Click here for more information about this.
  • GIVE THEM THE TOOLS: Many banks allow children to open up bank accounts. Encourage them by asking them to decide what to buy with the money they saved up! For example, Scotia Bank has some accounts called Scotia Kids, check them out!
  • MOTIVATE THEM: Buy them a piggy bank and wri9te down howmuch your child has to save up to buy what they want. They should be short-term rewards so that they don't lose interest. This type of effort-reward relationship makes children learn very quickly.

There are a lot of games and books that can help children learn about finances in a very pleasant manner. I recommend “The Money We'll Save,” by Brock Cole.  It was written to teach children how to keep costs down. In this book, a family has to get creative about saving.

Remember that you can subscribe to the Family & Money Matters Institute here if you want to keep reading more tips like the ones I just mentioned. You can also follow me on Facebook and Twitter. See you there!

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Elaine King - Family and Money Matters™ 2021