As parents, one of the essential life skills we can teach our children is financial wellness. Financial wellness activities help children understand the value of money and prepare them for a financially secure future. These lessons can be implemented through various financial wellness programs designed to educate kids about managing money, saving, investing, and overall financial wellness. Here are ten financial wellness examples you can use to teach your kids about money.
Before we dig into some ideas, note the objective of the subsequent is not to make you feel shame as a parent should you not be doing some of (or any of these things with your kids). The goal is also to not add to the weight you carry in the form of pressure to teach, lead, and provide for your kids. The goal is to provide a framework for things you can begin to implement to improve financial wellness for future generations. If this is the beginning of your conversation with your children, there is simply no shame in that beginning. Now, let’s dig in.
1. Start by asking your children what they know about money
Try not to complete the prompt for them. Simply ask them to talk to you about what they know (or don’t know) about money. After some conversation, you can follow this up by asking them some of the following questions:
- Do you know where money comes from?
- Why do we need money?
- What have you heard other people say about money?
2. Start with a basic financial wellness definition
Before diving into financial wellness activities, teach your children about financial wellness in principle. Explain to them that financial wellness refers to managing money effectively, maintaining a healthy financial life, and achieving long-term financial goals. Being financially well allows you to live a confident and stable financial life.
3. Introduce financial wellness tips through budgeting
Budgeting is a fundamental skill in managing money and an essential aspect of financial wellness. Teach your kids to create a budget by dividing their allowances or earnings into different categories, such as savings, expenses, and discretionary spending. This will help them understand the importance of prioritizing needs over wants and learn to allocate their money wisely.
4. Encourage savings
One of the most compelling financial wellness examples is teaching children to save. Set up a savings account for your child and encourage them to deposit a portion of their money regularly, ideally 10%. This will instill the habit of saving and demonstrate the power of compound interest. Discuss the financial wellness benefits of saving, such as being prepared for emergencies, accomplishing future goals, and building a solid financial foundation.
5. Implement financial wellness in the workplace (for teens)
If your child is old enough to work, encourage them to participate in financial wellness programs their employer offers. Financial wellness in the workplace can provide valuable lessons in managing money, investing, and retirement planning. These programs often come with financial wellness tools for employees, such as online resources, workshops, and financial advisors. Encourage your child to use these offerings to expand their knowledge and build a solid financial foundation.
6. Use financial wellness tools for employees (parents)
As a parent, you can also benefit from financial wellness for employees offered by your employer. These resources can help you improve your own financial wellness and, in turn, serve as financial wellness examples for your children. Share what you learn with your kids to foster open discussions about money and healthy financial habits.
7. Teach the importance of credit
Another vital aspect of financial wellness is understanding the role of credit in one's financial life. Teach your kids about credit scores, how they are calculated, and their impact on borrowing money or obtaining credit cards. Discuss responsible credit card use and the consequences of poor credit management. This will help them develop healthy credit habits early on.
8. Involve them in financial decisions
One of the best ways to teach financial wellness is by involving your children in financial decisions, such as shopping for groceries, planning family vacations, or selecting gifts for special occasions. This hands-on approach can help them understand the value of money and the importance of making informed financial choices.
9. Encourage philanthropy
Teaching your children about giving back to the community is an essential aspect of financial wellness. “If you take more from your community than you give, your community will suffer.”
Encourage them to donate some of their savings or earnings to charitable causes that resonate with them. This will help them develop empathy and understand the impact their financial decisions can have on others, while also reinforcing the importance of responsible money management.
10. Set a positive financial example
Last but not least, the most powerful financial wellness tip you can offer your children is to set a positive example yourself. Practice healthy financial habits like saving, investing, and living within your means. Be open about discussing money and financial challenges with your kids, as this will help normalize these conversations and create an environment where they feel comfortable discussing their own financial concerns.
By implementing these nine financial wellness activities, you can teach your kids valuable lessons about money that will serve them well throughout their lives. From understanding the basic financial wellness definition to participating in financial wellness programs, these tips will help your children develop a strong financial foundation that will support their overall well-being and enable them to achieve their goals.