Practical Ways to Introduce Financial Literacy to Your Children

By Rianka R. Dorsainvil, CFP® and Lazetta Rainey Braxton, MBA, CFP®



April brings us Financial Literacy month, a great opportunity to level-set and level-up your children’s understanding of the basic principles of finances. Having grown up in the digital era, your kids have the most modern tools and resources available to help educate, assist, and preserve financial literacy throughout their lifetime. A total win!


While children at different ages will utilize financial literacy on different levels, any age is a good age to review how the concept works and why we need it.


What is Financial Literacy?


In short, financial literacy covers the basics: “budgeting, investing, and overall financial management.” This includes learning how to manage and pay off debts, filing taxes, and earning good credit.


The Financial Industry Regulatory Authority (FINRA) estimates that 66% of Americans lack financial literacy. As you can imagine, this can have disastrous consequences as life progresses, including poor credit scores leading to the inability to purchase or rent a home or vehicle, and in some cases affecting employment. Financial literacy MATTERS.

How Can You Introduce Financial Literacy to Your Children?

With an array of financial products now available across the United States, financial literacy has become more mainstream. Whereas earlier generations may have made most of their purchases in cash, younger generations are relying on credit cards, mortgages, and student loans. We should understand and appreciate these differences.


Advice for Young Children: Offer Choices

Children start making choices on their own as soon as they begin walking. Educating them on the direction they are headed is your job as a parent and continues into adulthood. Offering guidance on financial decisions at an early age can help with healthy decisions along the way. Try this exercise at home:


  • Show your children how to divide their money into piles of “save,” “spend,” and “share.” This will help them delineate between fun spending and realistic spending in the future.

  • Add a layer to which they must earn the money to add to those piles. Perhaps you have them do a small chore to earn a set amount. By showing them that money is limited and must be divided, will give them an opportunity to understand how financial literacy works at a young age. This will give them a better vision of how life operates as an adult.


Don’t forget to congratulate them on any accomplishments.

Advice for Middle School Aged Children: Focus on Budget


At this point in a child’s life, they are able to manage small amounts of money and may even hold odd jobs of their own babysitting or around town helping neighbors. If they have yet to do so, taking a trip to the bank to open a savings account is a worthwhile exercise, as is encouraging them to make regular deposits. Tracking the growth as well as appreciating the decisions to make a withdrawal for special and hard-earned purchases can be gratifying.


By showing your children how to record any money going in and out on a columnar pad or an online financial tool, they will better understand budgeting and how to manage money more effectively in the future.

Advice for Teenagers: Bring Them Into Big Conversations


One way to introduce financial literacy to your teenagers is by allowing them to be part of your bigger financial decisions. By setting aside their lack of experience and giving them the opportunity to offer an opinion, will help in developing good judgments for the future.


Any time a big purchase is being made in the home is an opportunity to educate your teen. Because you are already making those financial decisions for the family, you can open up the conversation, so they understand the inner workings of how these decisions are made. This will help empower them to make these decisions on their own.


This strategy works best if the parent listens to their teenager’s input and lets them know their opinion is valued.


The Great News


Financial literacy month reminds us that there is no need to wait to educate our children on finances, at any age! Today’s youth are growing up with unparalleled and unprecedented access to information - let’s make it work in their favor.


We love the free tools that our friends at Junior Achievement have to share. We encourage you to bring your children into these important foundational discussions that will set the tone for the rest of their lives.

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