Teach Financial Literacy

Teaching financial literacy and investing is important to our children.  It’s the best way to teach them to avoid debt, and to provide for their future.  The question is, just how does one do this?

I admittedly haven’t embarked on a financial training program with my son yet, but I want to start giving him our grocery money for a month and say “you’re in charge of the groceries this month spend it wisely”.   Teaching him to mind the sales (not that I do but it’s a good idea right?)  It’s not like we don’t have food in the freezer (though sometimes it gets a bit light) and we’ll survive if he makes a big goof, but how else does a lad learn to handle doing the groceries if he can’t practice doing it?  I suppose he could learn the hard way like I did!  

Pretty soon he’ll get an allotment for clothes (or once he’s old enough to have a job, he can buy his own clothes).  I’m fortunate in that he does already have money and he (at this point) seems a naturally frugal child. 

He has money?

My son has been earning his own money for the past…. probably four years now?   I raise rabbits and I used to raise guinea pigs and mice.   My lad asked once if he could help or if he could earn money too.  We started with he could pick a rabbit, and as long as he helped me with the work of caring for them.  He made her a pet but helped me make the decision of who to breed her to and when, and he could keep the profits from her.  My son finally decided that he REALLY liked the mice so four years ago I said “if you do all the work, you can keep the money from them”.  Now he has some regular clients, though about half of what he raises goes to his snake now, but that saves him money too.  

Gradual Growth

He does occasionally need help…and as he’s matured he’s been given more responsibility.  For instance, I might not let an 8 year unescorted to sell some mice to a new guy, but I’ll let an 11 year do so as I watch from a distance, whereas my almost 13 year old can manage on his own.  This coming year he’ll be writing his own ads for selling his mice on kijiji.  He’ll be shocked by this, but it will be good for him.  He’ll have to monitor more when the mice are old enough to find new homes, I’ll teach him more how to take a good picture of them, showcasing the beauty of the mice he has.  I’ve taught there’s a cost to doing business as occasionally I’ll say “You owe me $20 for feed eh?” I’ll get that startled look and then gets me money from his latest sale.  He’s already learned how to check the prices of the competition and how to make prices lower so we get the guys who only want 10 mice instead of having to order a 100.  It’s a good way to figure out how to be an entrepreneur right?

This year he also helped with my annual yard sale (and NO, I’m NOT doing one next year).  Most years I gave him a table and whatever he personally sold of plants, homemade goods, or his leftover toys he got to keep.  This year I said “10% of the profits lad, as long as you help from start to finish, except when you have other obligations”.   He worked hard and was pleased with the end results.  ALL of this he squirrels away.  

In the process he’s learning also how to save 10% for missions, and 10% for a rainy day.  Everything he makes gets divided up.  80% that he squirrels away, and the rest goes into jars I maintain for him.  Just helps him if I keep it separate for him.  He’s been starting to talk about putting some in the bank which is great!  It’s a gradual growth, but I’m hoping it will put him in a better place for when he’s older.   

Wake up call:

I remember working with a girl, she was barely into her 20’s but her parents had gotten her on the saving track when she was little, and with careful banking and saving everything she earned, she had enough for a down-payment on a house as soon as she was past her probation period at work.  I was stunned that someone could do that!  This I want for my lad.   Wouldn’t you want that for your children?    To have their college tuition on paid up and being able to afford to buy a home once they pass their probationary period at a new job?  To own a home instead of being caught up in the whole throwing your money away on rent/debt trap.

The WHY:

Most adults don’t really understand financial matters, and therefore don’t teach their children how to watch their dollars well.   I learned long ago, paying cash for everything was the very best method for me to watch my money.  Put money in a private account that I can’t touch so it accrues over time. But no debt and VERY VERY little credit card action.   Hubby is slowly learning the same.  I want better for my son.   I want him to understand where money comes from and how you need to safe guard what comes in so you are prepared for potential hits in the future.

It is hard to learn that one MUST always spend less then what you earn if you want to get ahead financially in life.  In a day of easy credit and the use of debit cards, it is difficult to keep on top of spending if you don’t learn how to do so.

What should students learn?

1. How to make a budget and stick to it.  
2. How to prioritize spending
3. Understanding Credit and interest rates
4. Paying yourself first
5. Understanding the effect of taxes on tax-home pay

The earlier students learn these skills, the better. It leaves them better able to cope with today’s changing society.

Resources:

I have found some financial literacy and investment training sites you may find useful

Practical Money skills (a Canadian based site) Practical Money Skills is a free financial literacy program to help Canadians understand the fundamentals of money management. Created by Visa, the program offers money management resources including calculators, games, and lesson plans tailored for use by Canadian families and educators.

Ontario Teacher’s Federation has a site with some useful links on it. 

I am still awaiting more information on the “Making it Count” pilot program on Financial Literacy from BC.   OH LOOK!   I found the course on-line!!!   GO HERE. 

Games about Financial literacy for students in middle school and up.  Along with a list of 30 different games to help learn financial literacy.

Play games like Life, Pay Day, Monopoly etc.

You can make or buy visual cues to help students save money.

Investopedia: Learn about different aspects of investing. Knowledge is a good thing. 

Make it fun, make it real, make learning about money a practical skill for your students to learn as early as possible. Get them started well in life.

What steps are you taking to ensure financial literacy in your children?

Others in my you want to learn series

Coding.
Foreign Language.
Physical Education.
Math.