Education is a life-long process — just ask any parent! And for those with kids in school, it’s not uncommon to find that you can learn alongside your child as they work through their homework and assignments over the years. That can be helpful, especially if they’re learning about money or taking a financial literacy class.
Since financial literacy classes have only become a staple in many states in recent years, many parents may find that they’re learning something new about money as well.
For those teaching financial literacy or personal finance in schools, it may be helpful to give parents some homework, too, to try and help their children along. FINRA has some tips for parents who are looking to help their kids learn financial literacy, which may also serve as a sort of homework for those parents.
Here are the tips FINRA provides, which may serve as a sort of homework assignment for parents who have kids in financial literacy classes:
1. Discuss spending
There’s no better way to learn than by doing, so take the opportunity to teach every time you make a purchase — be it at the gas station, or grocery store. Kids will see money change hands, and you can also discuss your motivations or need to spend on certain goods or services.
2. Set a savings goal
Saving money is critical, and parents can display the importance of setting goals in conjunction with saving by setting a savings goal. Parents could even set up a savings account for their kids, and help them make a plan as to how to reach that goal.
3. Decide (together) how to store savings
As discussed, parents may want to open a personal savings account for their children. Or, they can take another route — there are a lot of ways to store savings. Parents can and should discuss the options with their kids, and weigh the pros and cons to really help them understand. For instance, you could look at different interest rates among savings account options. Or, discuss why you may not want to necessarily keep your savings in cash, and shove it under a mattress.
There are a lot of potential lessons to be learned!
4. Visit a bank!
If parents go to bank branches often, bring the kids! Banks may be boring for younger kids, but for students that are high-school-aged (or in the ballpark), banks or other financial institutions are going to become important parts of their lives. So, they should get used to being in or around them, even if many young people today are doing most of their banking online.
It can also be a good chance to discuss the different types of institutions (banks versus credit unions, for instance), to help them absorb even more.
5. Let kids budget
If kids have a job or receive an allowance, parents may do well to help them set up a budget. Sure, most students aren’t paying rent or electricity bills yet, but letting them create a financial plan — all while parents offer a guiding hand — can be another opportunity to “learn by doing” before they are off on their own.
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And check out our white paper: “Strategies for Increasing Financial Literacy Rates Among High School and College Students”
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