President Obama proclaimed in April 2011 that April is National Financial Literacy Month. He stated, “I call upon all Americans to observe this month with programs and activities to improve their understanding of financial principles and practices.” So… what does this mean and what have you done this month to improve your financial literacy? I believe that learning the value of a dollar at a young age is key to helping you with your finances as you get older.
If you are trying to remember something you have learned in the past month that has benefited you, remember how important it is for you to keep up with your finances. The National Foundation for Credit Counseling released a new survey about our money habits and our feelings about our financial lives. The survey found that 41 percent of respondents would grade themselves a “C” or lower when it comes to financial know-how; and 61 percent of U.S. adults don’t have a budget, the highest percentage in six years. A third of households carry month-to-month credit. Basically, we all need to open up the dialogue when it comes to discussing our finances. If you are a parent, consider some of the following ways that you can teach children financial literacy at a young age:
Conversation is key when it comes to speaking about money. This study points out that 71 percent of adults learned about saving from their parents, and yet only 36 percent of current parents say that they regularly talk to their kids about saving money. If you have kids, it is important for them to learn good money saving habits to achieve their financial goals early on in life. Explain to them about the family budget, and what your family does to save.
Teach delayed gratification by giving them an allowance to set saving goals for a toy they want. Sue Bingham and David Whitebread from Cambridge University looked at out how children learn about money. They found that when parents helped children set goals to save for a new toy or game, this helped them realize the value of their money. If children spent their money right away on something else, let them. They will realize that they will have to wait longer for something they really want.
Teaching children how to save early on will help them start early as adults. Bingham and Whitebread discovered that children like to save because they enjoy acting like adults. Children want to be like their parent, which means they need positive role models.