raising kids
How To Build
Your Kids’ Financial Literacy And Nurture
Their Independence
N
By Gabriele Delmonaco
early 4,900 Staten Islanders graduated high school this year. But how prepared are they to manage their own money as they embark on a new career or college journey? The ability to understand and effectively use financial skills— budgeting, investing, and basic personal financial management— is a critical skill many parents, and schools, fail to prioritize. In addition to raising four kids of my own, I lead A Chance at Life, a nonprofit that supports at-risk youth across the globe and is with a program that launched on Staten Island this summer. Here are five tips that we use to build kids’ financial literacy and nurture their independence.
Start Young
Research shows that by age 3, kids grasp basic money concepts. By age 7, many of their money habits are already set. An investment in financial literacy will pay dividends for years to come. Kids become disengaged from a subject they feel is not relevant to them. So, as they do chores around the house, reward them with a small weekly allowance and show them how to build a simple budget to achieve their goals (like buying that doll they wanted at the store). As they ask questions about the world around them, use your answers as an opportunity to explain the value of money and wise financial decisions. Start the conversation about finances with children early, and develop more advanced discussions as they age. 16 August 2021 • siparent.com
Discuss Needs vs. Wants
There are two common phrases all parents hear from their kids: “I want it!” and “I need it!” When it comes to financial literacy, budgeting, and quality decision-making, differentiating between wants and needs is an imperative skill. Hone this skill with young children at the grocery store. Show your list of items to your kids and ask what they think is a want and what they think is a need. Explain that toilet paper is a required purchase because it is essential for everyday life. The cake mix is a want, it is something the family wishes for and has a desire to possess. With older kids, progress to discussing how a want purchase can inhibit a need purchase. Buying that video game that you want now is not necessarily a bad decision, as long as there is a savings cushion to buy something they need, like a set of textbooks, as they head off to college.
Create A Savings Account
What can start as a piggy bank should turn into a savings account. Bring your kids to the bank with you to open an account. Dive deeper. Explain terms like interest, balance, wire transfer, and ATM. The more they know about finances, the more they can take control of their own spending, saving, and financial decisions. While saving is important, it is also critical to educate children on the value of giving and how it helps build a stronger community. Use a website like CharityNavigator.org to search for charities that cater to causes they are passionate about. Or keep it simple for
