The current economic challenges were certainly unprecedented. The COVID-19 pandemic has closed most schools and businesses, and many families have been unexpectedly quarantined together. While most schools continue to teach virtually for a few hours, there is no doubt that we are all doing our best and trying to achieve SOME learning. This is twice as many parents try to help with these school hours while doing their OWN jobs, perhaps for the first time.
One of the silver lining in all of this is that this can offer some great contract hours to teach your kids finance. Here are some tips on how to teach kids financial classes when they're not at school.
The importance of an emergency fund
If ever there was a time to teach a good lesson about the importance of have an emergency fund, it's snowing! It seemed overnight, we went from everything normal to record unemployment and total orders to block. If you were lucky enough not to be affected or to be able to use your emergency fund to help you, talk to your children about it. If the economic devastation caused by the pandemic has caused you to burn your savings, be honest with your children. Don't worry, share your experiences and vows Start an emergency fund as soon as you can.
Teaching children about independence
In this sense, the current pandemic offers an important lesson in the importance of independence. An emergency fund (money) is an aspect of self-reliance, but there are other ways to prepare for it. If resources, finances, and your living space allow it, you should teach your children the value of a small supply of important things. You don't have to charge fully in your underground cavern and hoard years of supplies! Just collect a few extras of things that your family uses regularly and eats every week. Just think how nice it would have been to have a few extra rolls of toilet paper a few weeks ago …
Money doesn't have to be abstract
We live in an increasingly abstract financial world in which trillions of dollars are moved between financial institutions every day. Even most people do their daily shopping with a credit card or some other abstract payment method (someone called Venmo?). However, if you teach children money, it's best to stick to cash. Even older children learn the real value of money best when it is made with material money and money. When everything is done electronically, it is more difficult for children to see the true value of what money is.
If possible, it is even better to tie the money to the way it was earned. Instead of telling them that the happy meal or toy they want to buy costs $ 5 or $ 10, you pay your kids for extra jobs in the house. Then you can teach your kids that the item they want to buy takes an hour or two to pick up sticks, mow the lawn, or clean up the basement. You may find that this will help you determine a little more about how you want to spend your money.
Be honest and open
Gone are the generations in which money was a confidential topic that was never discussed. Most experts agree that talking to your children about money and letting them participate in how money is spent as a family is healthy. This does not mean that children should have the same say, but they should be informed participants, and this participation increases with age.
There is a fine line between openness and honesty with your children about your financial situation and sharing too many of your concerns. Of course, there is currently great financial uncertainty for many families. As adults, we understand that things, although stressful at the moment, tend to work well. Children's brains are not always developed enough to understand these nuances. So be careful with what you share and how you share it, but share it!
Don't make a lecture out of it – teach all day
After all, most parents know that nothing prompts a tween or teen to turn off as soon as possible than the hint that something will turn into a lecture. Instead of bringing the family together for a great lesson, look for ways to set an example all day long. You can also share information about how the latest changes affect your family's budget. Children might be interested in knowing how your family's water bill has been much higher in the past few months, but your gasoline costs have dropped significantly. Or look at the changes in the data usage of your mobile phone when everyone can be reached via WiFi at home.
Make it your goal to share at least one piece of financial information with your kids every day. Over time, these nuggets will build up and your kids will be on their way to outstanding financial literacy!
Dan Miller (18 posts)
Dan Miller is a freelance writer and founder of PointsWithACrew.com, a website that helps families travel for free / cheap. His home base is in Cincinnati, but he tries to travel the world as much as possible with his wife and 6 children.