Making $ense Out of Cents

Francie Alexander teaches parents how to talk to kids about money.

By Francie Alexander



Making $ense Out of Cents

Many of us may have had a revelation about our family’s finances. How do we help our kids prepare for their financial future, cope with the current economic crisis and understand any steps we may be taking to get our budgets under control?

Start Talking
It is hard not to be aware that the economy is bad shape, and most of us are impacted in some way. Find out what your kids are hearing and listen to their concerns – most school-age kids will have some idea of what’s going on. And most of us are cutting back in some way, so involve your kids and get their thoughts as appropriate. You might be renting DVDs at home instead of going out to the movies or driving less and it helps for kids to know why.

Money Matters from Preschool to College and Careers 
Preschoolers and kindergartners are interested in money as they see it used when they go to the market, get on a bus or shop for clothes with you. Tell them the names of the coins and the numbers on the bills and explain that these aren’t toys. However, play money is a safe way for kids to learn about currency and counting – and they really like to role-play going out to eat and shopping. 

Grade schoolers really get it when it comes to money. Use your money talks to explain the difference between cash and credit. This is a good time to start an allowance – consider a dollar for every year of the child’s age every two weeks for younger kids and every week for high school age children. Teens today are more a part of the consumer culture than ever. They need to know how to manage money. It is important for them to set financial goals such as purchasing car insurance and saving for college. It is good for high school age children to have a checking account and to know how to use credit responsibly. 

I think the 3$ (ess) concept of teaching kids about money really works. When they start getting an allowance or money from jobs performed or gifts, start them on a $aving, $pending and $haring plan. Try to set up a savings account early in your child’s life and watch the money grow. Spending doesn’t seem as hard to teach, but kids do need to make thoughtful decisions and understand the consequences when money isn’t well used. Finally, even in tough times, it is good for all of us to consider how we can help others and to experience the values of sharing and giving. 

Do the Math 
Money can be a great motivator for helping kids learn math. Counting equivalences and all of the basic operations can be taught and practiced using money. 

How would your kids do? 
I’m optimistic that investing our time and resources in our children’s education will pay big dividends in the future!

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Financial Literacy