Teaching your students or children financial literacy is an important life skill that can be taught in school or your homeschool.

What is financial literacy?

• Saving and Spending
• Budgeting
• Borrowing/Interest Rates
• Personal Financial Management

The best steps to teaching your students or children financial literacy are the following:

• Give them an allowance: if it works for your household, it can be a teachable experience for a child to earn an allowance for doing chores around the house. If you decide to take this route, I find it helpful to have a list of tasks and an amount attached to that task. For example, mowing the front and back yard = $10.00 or washing the family laundry for the day = $5.00. It is also important to let them know that if these duties are done to the parent’s expectations, they will get the full amount; if they cut corners and do not perform the task to the parent’s expectations, the initial amount for the task will be reduced. This can be used as a learning experience and allows the parents to show the child how to correctly perform the task. Some parents decide to give a weekly amount and give their child a list of chores to do to earn that amount. For example, if a parent gives their child a $20 a week allowance, they will give their child a list of tasks to perform for the week to receive that allow (i.e., clean their bedroom, do their wash, unload and load the dishwasher each night, cook 1 meal during the week, wash the family car, etc.).

• Work on a budget: if you allow your child to have an allowance, it is beneficial to show them how to work on a budget. Your child may want to purchase a smartphone. This is a good opportunity for you to show them how to research and find the best phone for the best price. Stores have sales all the time and this can be a learning experience in teaching your child the prices of items, the sale prices, spending extra to get a warranty, finding the right phone plan for your child, etc. After you conduct research and find the phone you want to purchase, your child will know how much they need to raise to make the purchase. You can show them how to make a simple spreadsheet with formulas that will calculate their deposits, debits, credits, etc. I have one for you in the shop on this website: Digital Check Register – https://tidewindacademyhomeschool.com/product/digital-checkbook-register/. You can use this digital check register as a good beginning and you can add more columns and formulas that meet your budgeting needs. Another good example of helping your child work on a budget would be letting them be involved in weekly or bi-weekly grocery shopping. Seeing the prices of items that a family needs and wants will hopefully help them to understand the value of a dollar. If your high school student works a part-time job, this is an excellent opportunity to show them how to create a budget, open a checking or savings account, get a debit or credit card, etc.

• Teach them about debt: it is never too early to teach your child that everything costs money. When it comes to college, this is an excellent way to teach them about debt in regarding financial aid. Even if a child’s parents put away money for their child to attend college, circumstances can always change. A child’s education is an excellent way to teach them about focusing on long-term goals and exhibiting discipline to achieve goals. When your child takes on financial responsibility as far as having a checking, savings, debit, or credit card, they will make mistakes in their journey to achieve their financial goals. When taking out loans, you can teach them that when they take out $20,000 in financial aid, they will be paying back more than they were loaned. This is your opportunity as a parent to chime in and teach them what you have learned from your life experiences. Debt is inevitable, but teaching them to control their debt is the key to success. Children need to learn that you do not spend more money than you have, if you have to use credit, you have to pay off the credit loaned to them as soon as possible so it will not affect their credit. Teaching your child the burden of debt will be one of the best financial aspects you will ever be able to teach them. If you teach them about debt management as they become pre-teens, they will have invaluable knowledge to use for their future.

• Teach them self-control when it comes to buying products: As we have learned as parents, we cannot always purchase everything we want because we need to buy everything we need like groceries, gas, pay mortgage or rent, make a car note, pay utilities, pay car insurance, etc. We as parents need to teach our children self-control. They need to understand that if a new version of an iPhone comes out, it will most likely be more expensive than if they wait 6 months. Instilling good purchasing habits is crucial in making good financial decisions in the future. When you teach them to buy everything with cash and only use credit as an emergency, you have instilled a great life lesson. If your child sees you making good financial decisions, they will learn by your example. If we approach teaching them good financial decisions and they make bad decisions along the way, it is okay – hopefully, this is how they will learn not to make that decision again. They will learn from mistakes, just as we have learned from ours.

• Teach them how to build credit: we as parents must teach our children how our financial decisions positively and negatively affect our credit rating. When they understand that the financial decisions they make as they are young adults will affect their future, you have taught them one of the most invaluable decisions you will ever be able to teach them. Some banking institutions will allow you to list your children as authorized users on a family credit card account. I have done this for my children and as they grew up, and I was able to establish good credit for them. This is a good way to teach them good financial habits. If they abuse their credit card, they need to understand that it will negatively affect everyone’s credit on that account. This is a good way to establish self-control as they will understand that their bad decisions will negatively affect everyone. If they establish credit as a young adult, this will help them tremendously when they go to college and apply for credit cards of their own. Talk to them about interest fees, the choices of choosing a good credit card, and best practices of credit card usage. It will be a great benefit for them to have established credit while they are in college if they choose to purchase a car versus a child who has no established credit and will end up paying more for a vehicle.

In conclusion, financial literacy is the best life skill that you will be able to teach your child. As a parent, you have been teaching them more than you realize since they were born. Kids are sponges and will observe and absorb everything they see you do. Their actions will reflect what you have taught them. While they are in middle school, they are old enough to understand the consequences of their actions. It is good to teach them financial literacy at this age because they are still impressionable and need to learn to make good financial decisions. If we teach them good decision-making skills when they are young, we can be assured that they will have good decision-making skills in the future. Understanding that they WILL make bad decisions, this will be a good learning experience for them. Teaching them how to right their wrongs along the way will impact them and be beneficial down the road. Ask their opinions about decisions you have to make and allow them to give their input. This will be an excellent way to understand what and how they are thinking and show them the pros and cons of their decisions. Have extensive discussions about their input and redirect them in the correct direction in making the best financial decision.

We, as homeschooling parents, are the best ones to teach our children life skills. They need to know how to clean their rooms, cook for themselves, do their laundry, do chores around the house, hold babysitting or lawn-mowing jobs, etc. If they do not learn from us we, as parents, are doing them a great disservice as they grow into adults. Life skills are NOT taught extensively as they should be in public schools. Some financial literacy topics are highlighted, but it is sometimes not technically part of the school district’s curriculum. As parents, we are responsible for them and are there to teach them everything they need to succeed as adults. These are just a few steps in teaching some financial literacy topics for your child’s financial journey.

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Tina – Big Easy Homeschooling Mom

https://www.linktr.ee/tidewindacademy

Please remember to check out my shop for the Digital Checkbook Register.