Studies conducted by the National Financial Educators Council found that 4 in 7 Americans are financially illiterate. This has led to a nation of adults who are overspending, living paycheck-to-paycheck, and making poor financial decisions.
One way to combat this problem is to start teaching children about money early. By encouraging kids to be financially literate, they will learn how to spend and save wisely, as well as avoid unnecessary debt. This can also help increase their chances of success in their future careers, since they will be able to understand and use money more efficiently.
In order to help teach your kids about finances, here are 10 tips that you can use:
- Let them earn their own money.
- Teach them to make a budget and save money.
- Open up a bank account.
- Show them how to invest in different arenas.
- Explain the difference between a debit card and a credit card.
- Help your kids understand the importance of interest rates.
- Show them how income and expenses align.
- Show them the signs of predatory lending and scams.
- Show them how overspending leads to debt.
- Give them options to see how money works.
One of the best ways to teach your kids about finances is by starting early — as soon as they begin asking questions about why you leave home every day or why people pay for things with pieces of paper instead of rocks or chicken feathers. It is never too early to start preparing your kids for financial success.