Ways to discuss money with your kids

October 19, 2015 | Dawn Virgilio

A parent is truly the first person who introduces money to a child—it can be given to a child to buy lunch from the school cafeteria, or the child can earn it by completing their homework or daily chores. And, of course, we all know about the magic of the tooth fairy—but we only have so many teeth! What happens when the teeth are gone, and the young child you once knew turns into a 16-year-old who wants a new cell phone, car or money to spend on social outings? What happens when that teenager turns into a college student who now has to budget their studies with rent, groceries and utilities?

That’s why a discussion about money is important to have with your child as they continue to grow older and learn more about the world. Here are a few ways to start that conversation:

Set up your expectations at an early age

Your child will bring up the fact that they have a driver license but no car, or that their best friend has the latest smartphone and that they have a flip phone. You can start the conversation way before those milestones have been crossed, and set those expectations (yours and theirs) ahead of time. If you want your child to be involved in the car-buying process from the beginning, offer to discuss what their dream car may cost, and look for ways that you both can work together to buy that car or something similar. Also, discuss all the outliers: gas money, car repair, insurance, washing, etc. That way, your child knows that they need to budget and spend responsibly.

Teach your kids to save

At Mission Fed, a Savings Account can be started at any age. If you start one for your toddler today, imagine what that money will grow into: it could help with milestones like prom, college applications or a little splurge on that concert your kid has raved about for months. Once you introduce your child to their Savings Account, you can discuss how you saved money for them, and how you will transition that responsibility (and what’s already in the account) to them.

Learn what resources your child’s school offers

One of my peers told me that her daughter’s 4th grade teacher led an activity called “Town.” Each student decided on a business, and would team up with another classmate or two to run the business. Some people sold homemade keychains, paintings, rocks—you name it, it was there! They even offered a bank, so students could learn how much money they had per week and keep track of how much they earned and spent.

Does this sound familiar? Junior Achievement of San Diego County, an organization whose mission is to empower young people to own their economic success, runs JA BizTown. After four weeks of curriculum and classroom preparation, elementary school students visit the mini-city and make personal financial decisions as well as for their business, hold business meetings, pay taxes and donate to charity. In addition, Mission Fed JA Finance Park for high school students, which opened on October 1, 2015, is a high-tech facility that takes “reality-based” learning to a new level by placing students in authentic, real-world scenarios, where they take control of their financial decisions. The JA Finance Park experience allows students to imagine who they want to be, while providing hands-on tools to plan for their future and reach their full career potential. We’re proud to be a part of providing the fantastic opportunity for high school students to learn the importance of handling their finances well!

We all have the ability to seek out the tools we need to improve our financial literacy, but it’s important to remember that these skills take time to polish! At Mission Fed, your success is our bottom line, and we’re happy to assist you when you’re ready to have these discussions with your child.

This article contains a link for a website that Mission Fed does not control. Mission Fed is not responsible and does not assume liability for the operations, content, links, privacy or security policies of third party websites.

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Dawn Virgilio

Dawn Virgilio

Dawn Virgilio is VP Financial Planning & Analysis at Mission Federal Credit Union. She has enjoyed a long career working for financial institutions, the majority of that time (25 years) dedicated to credit unions. She really likes numbers, especially when they add up and multiply.

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