Senate Cents: A Financial Wellness Blog

Mastering money management is a complex task that becomes significantly more difficult if one waits until adulthood to learn the ropes. Early financial education for children can pave the way to their financial independence in later years. Research shows that early financial literacy is associated with beneficial outcomes such as reduced debt, increased savings, and better credit scores. As individuals progress into adulthood, this foundational knowledge also correlates with greater net worth and more informed investing decisions.

Parents play a pivotal role in shaping their children’s financial futures. Through direct communication, setting examples, and involving children in financial decisions and activities, parents can impart essential financial skills that have enduring benefits.

Ways Children Can Learn About Money

• Observation: Children absorb lessons by watching their parents. Demonstrating the link between work and financial stability, such as discussing how your job supports the family’s lifestyle, can be eye-opening for them.

• Inclusive Decision-Making: Involving children in discussions about bills or significant purchases can illuminate the intricacies of financial decision-making and budgeting. Tailoring explanations to their level of understanding underscores the value of thoughtful spending and budgeting.

• Active Participation: Practical involvement, like grocery shopping or managing a savings account, concretely teaches budgeting and the importance of saving. These real-world interactions foster a deeper understanding of financial concepts.

• Reading Together: Children’s books focusing on financial themes offer engaging ways to discuss earning, spending, saving, and more. Libraries or online platforms can be valuable resources for finding such literature.

• Playful Learning: Engaging in board or online games that include financial transactions can introduce complex financial concepts in an enjoyable manner, sparking valuable discussions about money.

Financial Education Resources for Children

The National Credit Union Administration (NCUA), the Consumer Financial Protection Bureau (CFPB), the U.S. Mint and the Federal Deposit Insurance Corporation (FDIC), provide different types of free financial education materials for pre-kindergarten through college students.

• The NCUA offers interactive games like World of Cents, which teaches children about money management through gameplay, providing a fun platform for learning about earning, saving, and spending. Test Your Money Memory is a match game that pairs United States coins and currency with the appropriate president. Hit the Road is a game about earning and spending using a trip across America.

• CFPB’s Money As You Grow program teaches children how to reach certain age-appropriate financial milestones. The CFPB also offers a list of children’s books that can help open conversations about money.

• The U.S. Mint also has free games and activities for children. From math games to coin scavenger hunts, you can find all sorts of smart money conversation starters.

• The FDIC has a Money Smart curriculum with modules written for specific age groups. While targeted toward teachers and schools, parents can use the Money Smart program at home, too. If you don’t know how to start the conversation with your children, check out the children’s books offered as references in many of the modules. These books can be a good way to start a lesson and begin a smart money conversation.

Engaging children in discussions about finances, involving them in budget-conscious shopping, reading to them about financial matters, and integrating play into financial education are strategies that can significantly influence their capacity to manage finances effectively in the future.

Article content and third-party links are provided for informational purposes only.