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financial literacy

How To Teach Your Kids About Money

By //  by Ruddigar Simpson

Teaching kids about money can feel overwhelming since it can be such an emotional topic. But, starting early is a great way to ensure that your little ones get a head start on a healthy financial future.

If you are stuck on ways to teach your kids about money, Low Income Financial Help has provided a few simple ideas to jog your creative juices:

Ages 4-7

Kids this young can learn about money. Keep it simple – For example, help them understand that when they want a toy or a snack from the store, it costs money. Help them learn about the importance of waiting to buy something by having them earn money to pay for the want.

They may be a little too young to really grasp counting money, but you can make it simple by creating a chart showing how many dollars they need to earn and marking the dollars off with a sticker as they earn more money.

Don’t be afraid to talk about money and be patient with teaching them. While paying for groceries or gas with your bank card is often convenient, try letting your children see you pay with cash here and there as it’s a great way to teach them about money.

Piggy Bank Family

Ages 8-12

Kids this age can comprehend how to add and subtract money. Let them earn money for jobs by creating extra chores at home they can do to earn cash. Now is also a great time to teach them basic saving skills. Sit down and teach them how to separate 10 percent for savings, 10 percent for giving (charity, church etc.) and the rest goes to their expenses.

Should you give your kids an allowance?

Kids may struggle with not being able to spend all of their money, but if you start teaching them the importance of saving early, they’ll quickly see how fast their savings add up.

 

Teenagers

Teenagers are usually old enough to get some type of work outside the home, which means they will be making a lot more money. Help them open their own bank account and remind them to set aside a certain amount into savings each month.

Teenagers can grasp budgets. Let them sit down with you and watch you balance your budget. Show them how to keep track of their finances in the checkbook (if they still exist) and let them see how much bills cost every month. If you can show your teens how much you pay for rent, utilities and groceries, they’ll have a much better understanding of how money works.

Many parents are afraid to talk to their kids about the monthly bills, like it’s some sort of private affair. Being open about money will be much more helpful for your children.

Once you are comfortable you may even let your teen try to balance the budget one month. You may end up eating canned beans for dinner for the last week, but your teen will get hands on experience of dealing with real money.

Money shouldn’t be a taboo subject among family members. Teach your kids about money now so they have the information they need when they move out on their own – and stay out of debt!

photo by Stuart Miles via freedigitalphotos.net

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Filed Under: Personal Finance Tagged With: budgeting with kids, financial literacy, kids and money, teaching

Why Financial Literacy Is So Important

By //  by guest

[The following is a guest post on behalf of Advisor World on the topic of financial literacy.]

How Important Is Your Financial Literacy?

Making informed financial decisions can be difficult. You have monthly bills to pay, and you might wonder where the money is going to come from. Most Americans have no idea how to control their finances. Therefore, it helps to become educated on how to better manage your finances.

What is Financial Literacy?

In order for you to be financial literate, you need to know how to deal with credit (and take advantage of credit card benefits). You should be aware of the process of saving money, and you must know how to budget your finances. You need to have a plan for how you are spending your money.

April Is Financial Literacy Month

President Obama has announced that April is financial literacy month. Financial literacy is the capability to comprehend basic economic provisions and conceptions related to your family or business. The White House wants to help Americans better understand their personal finances, so they are trying to help citizens become financially literate.

Ways To Get Started In Becoming Financially Literate

  • Read: Find information in books, magazines, and newspapers. Become skilled in the world of finance.

  • Be willing to make changes: You must be flexible. You cannot expect to spend money frivolously.

  • Be patient: You cannot become financially literate overnight. It takes time to get a grip on your finances.

  • Take a class: There are investing and financial planning classes that are offered. Check in your community to see what financial classes that you can take.

  • Get advice from other people: If you know someone that seems very financial literate, ask for their advice.

  • Look for help online: There are many online forums where you can discuss financial decisions.

  • Quit making excuses: Don’t complain about not having enough money. In order to manage your money effectively, you need to change your attitude and be positive.

Study Your Paycheck

Your education and job have a huge impact on your income. Therefore, when receiving your paycheck, you should know the difference between your gross and net earnings. Be aware of what you are actually bringing home.

Plan A Budget

After realizing how much money you are actually making, then you should plan a budget. Keep your checkbook balanced, so you can keep track of your money. Know exactly what you are spending, and set your goals accordingly.

Loans

You should not get a loan or borrow money unless you know that you can pay it back. You should not charge unnecessary purchases on your credit card. Interest can really add up, so keep your credit card balances low.

Save Money For Emergencies

You need to also save money each month. Sometimes, you might encounter emergency expenses, and having extra money available will keep you from having to take out a loan or put it on your credit card. Your emergency fund should cover 3 to 6 months of living expenses.

Know Your Credit Score

It is a wise decision to know your credit score. You can get a free copy of your credit report annually. You can keep track of your credit, so you can make sure it is accurate and up to date.

Being financially literate can help you secure the financial future that you deserve. You should make good financial decisions so that you can use your money wisely.

Photo by Salvatore Vuono

Filed Under: Personal Finance Tagged With: americans well informed on automobile retailing economics, credit card, credit history, finance, financial, financial concepts, financial decisions, financial literacy, financial literacy month, financial planning, financing, human interest, money, personal budget, Personal Finance, personal finances, sharon lechter, wise

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