Teach children financial management skills without ever talking about money

You can teach youth good financial management habits by modeling key life skills that transfer to the world of money.

Good financial management skills aren’t necessarily about money. Whether children are 3, 13 or 23, parents can instill good life habits that parlay into sound financial skills. Parents have the responsibility to teach their children how to be independent and to think for themselves. There are many ways to instill good habits, but few are more intimidating for many parents than money management skills. The good news is that it doesn’t have to be daunting, especially with help from resources available at Michigan State University Extension. Here are a few tips to get started.

Young children learn from you whether you are intentionally teaching them or not

Let them hear you and your spouse talk about setting priorities and planning ahead. Even if they are not money-related topics, they will pick up that communication between partners helps both consider each other’s perspective when making a decision. When your child observes you paying bills or checking over your bank statement, it sends a message that you think those activities are important. Even the casual comment that you “want to pay this bill on time” registers that you believe timeliness is a priority.

School-age children watch what you say and do

You don’t have to be a financial expert to send many important messages. For example, verbalizing that purchasing one item means you will have to forgo another teaches the concept of “opportunity cost.” A discussion of whether to go out to eat or eat at home may show how you weigh the expense against the benefit. Waiting until an item goes on sale conveys the value of delayed gratification and wise consumerism. Saving for a vacation or a new refrigerator communicates you have to plan ahead for big-ticket items.

Place importance on your job

The importance you place on your job will quietly register with teens and young adults in your life. They may notice you arrange appointments around your work schedule and go to work even though your muscles are sore after playing basketball with them on Saturday. These actions communicate you value your job and want to be a good employee, which in turn allows you to pay your bills and have some level of financial freedom.

Be on the lookout for opportunities to teach children life skills that will build relevant and invaluable competencies in the world of money management. These will be important when they strike out on their own!

For more information on youth money management topics, check out the 4-H Youth Development website, contact your local MSU Extension office or go to eXtension's Personal Finance website.

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