COLLEGE STATION — Children are not born with “money sense” so they need their parents, educators, caregivers and other adults to help them learn how to properly manage money, said Nancy Granovsky, Texas A&M AgriLife Extension Service family economic specialist, College Station.
“The ability for children to learn how to properly use money is something that will benefit them throughout their entire adult life,” Granovsky said. “They can learn money management from parents and other adults — if the adults take the time to discuss the value and usefulness of money with them, show them how to plan and budget, and provide them with some practical learning experiences.”
Granovsky said children learn about money by example and experience. Adults can begin to teach them sound money management skills as soon as they are old enough to understand money is used to get them the things they need and enjoy.
“Children are absorbing everything they see and hear parents and other adults do or discuss about money, positive or negative, so it pays to become a positive role model,” she said. “A parent’s values as they relate to money – such as how they spend, save, borrow, use credit and the like – are those their children are most likely to emulate and adopt.”
She said young people need to know about making sound money decisions and what’s most important when shopping and buying.
“For example, if you use a list for your shopping and have a budget for that shopping, your children will consider that ‘normal’ and will probably grow up to use a list and think about budgeting when they shop,” she said. “But if you spend money before you actually have it and tend to buy impulsively, your kids will likely learn those habits as well.”
Granovsky said to include children in discussions about budgeting family income. Being able to set financial goals, budgeting and then matching spending with planning is a life skill that takes practice.
“Learning to properly manage money allows young people to distinguish between wants and needs, teaches them the importance of budgeting and saving and helps them make sound spending decisions,” she said. “On the other hand, not learning proper money management can lead to embarrassment, financial stress and personal anxiety.”
Granovsky said information on teaching children about financial management skills and habits can be found at the eXtension website, https://extension.org/, which provides research-based information from America’s land-grant universities.
She said “Talking to Children About Money” at this site is particularly useful for tips on how to address money issues and help build money management skills with children at different stages of development, including young children ages 4-8, adolescents ages 9-13, and teenagers. That can be found at http://bit.ly/2cYgbeB.
Granovsky also noted the Consumer Financial Protection Bureau has put out a report of how young people acquire the building blocks of good personal financial management. The report, which can be found at http://bit.ly/2cFAyxz , describes the essential building blocks of executive function, financial habits and norms, and financial knowledge and decision-making skills that can be developed starting in childhood.
“The report also includes strategies educators, policymakers, parents and caregivers can use to help young people develop these needed skills and habits for money management,” she said. “It provides guidance and tips on how adults can help children get the knowledge and develop the skills needed to manage their money.”
She said by working together, adults can help young people gain the financial capability they need to help ensure a more secure and rewarding future.
Granovsky recommended checking with the AgriLife Extension office to see what youth financial education opportunities are available. She said some of these materials may include Welcome to the Real World, the National Endowment for Financial Education’s High School Financial Planning Program and the 4-H Consumer Decision Making Contest.
Additional resources for helping youth learn financial responsibility and good financial habits include:
— Federal Deposit Insurance Corporation, Teaching Young People About Money – Tips for Parents and Caregivers, http://bit.ly/2cZ06Dk.
— Federal Deposit Insurance Corporation — Money Smart for Young People, http://bit.ly/2cEDqXT.
— MyMoney.Gov – Resources for Youth, http://www.mymoney.gov/Pages/for-youth.aspx.
“This site has activities and video games parents can use in teaching youth about money,” Granovsky said.
— Kids.gov – Money component, https://kids.usa.gov/money/index.shtml.
“This website from the federal government is part of a larger Kids.gov website that has links to additional resources for parents,” she said.
“This curriculum from the FDIC is one of several Money Smart resource curricula that can be used by teachers or parents,” Granovsky said.
— Jump$tart Coalition for Personal Financial Literacy, http://www.jumpstart.org.
“This coalition of financial education stakeholders, of which the U.S. Department of Agriculture’s National Institute of Food and Agriculture and land grant university Cooperative Extension system are a part, offers a variety of resources of interest to both parents and teachers.”