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April is Financial Literacy Month — but most American high-school students aren’t given a personal finance class before they graduate. Instead, many parents must carry the responsibility of teaching their children money lessons.
I spent 15 years as a personal finance teacher and am the father of three. Over time, I have learned as a parent that there are three essential principles to keep in mind when teaching my own children about money.
1. Don’t lecture: Use experiences and hands-on resources to allow kids to learn through trial and error. Christian Sherrill encapsulated the approach well in this 40-second clip from the Modern Husbands podcast.
2. Choose the right time: Be aware of the teachable moments that arise naturally and your kids’ moods. Your moment to teach is when the time is right for both of you.
3. Connect lessons to your family’s values: The marriage between money lessons and family values is more important than any lesson our kids learn in school. Money talks can build values in our children that can be passed on to future generations.
Read: Debit or credit? Giving your kid one of these cards might not be as crazy as you think.
Here are some age-based money lesson ideas and resources you can use with your children:
Elementary school ages
Meet the Money Monsters: The Money Monsters are a group of creatures who are new to this world. They need to learn about many important things like school, friendship and financial literacy. These free, downloadable books are accompanied by parent guides. Sets of 25 printed books are available for free for large groups.
My favorite lessons for elementary-age children are drawn from ideas shared in the book “The Opposite of Spoiled,” by Ron Lieber, who has been the “Your Money” columnist for The New York Times since 2008. He was a recent host on the Modern Husbands podcast, where he shared ideas such as why to have the tooth fairy swap out an animal tooth for a child’s and how giving to a homeless person can teach generosity.
Middle school ages
Empower your children to make financial decisions by putting financial decisions in their hands. In my family, we gave our children in cash what we budgeted for back-to-school shopping. Their responsibility was to make a list and purchase what they needed for school. Anything they saved, they kept. They immediately shifted their mindsets from begging us to buy things to asking whether they could not buy something.
High-school ages
Planning how to pay for college is complicated for some students and may require multiple conversations with family, advisers, and the school financial aid office. The CFPB’s Your Financial Path to Graduation tool allows students and parents to compare financial aid offers.
Students are tasked with juggling the real-world challenges of maintaining academic focus, making connections useful for their futures, maintaining their overall happiness, and entering the workforce without crippling college debt. Time for Payback is an ideal tool to spark conversations about college between parents and their children.
Young adults
Applying credit-building strategies early in our adult lives is necessary to avoid high-cost borrowed and lost employment opportunities.
The Wall Street Journal developed the Credit Score Game. Players select a starting credit score to face various scenarios in which they try to guess what will happen to their credit score based on the scenario. What happens when you carry a high credit-card balance, miss a payment, or pay off a loan? Players learn the answers by playing the game.
Brian Page is the founder of Modern Husbands, which provides men with advice about money, marriage and family matters.
Also read: How you and your partner can have a fighting chance to stop arguing about money
April is National Financial Literacy Month. To mark the occasion, MarketWatch will publish a series of “Financial Fitness” articles to help readers improve their fiscal health, and offer advice on how to save, invest and spend their money wisely. Read more here.
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