A list from WalletHub released earlier this year ranked Oregon the 30th most financially literate state. It’s not something to brag about and our state’s financial literacy standards are far from perfect. A new survey from COUNTRY Financial found that when it comes to financial matters, 60 percent of Oregonians rely on what they learned from mom and dad. Though the survey found that parents preferred to discuss the birds and the bees or go to the dentist, than talk about finances with their kids, it’s no surprise to see the importance of parents’ role in shaping our kids’ money management skills. Not sure how to broach the topic with your kids?
Here are some simple steps to start the money conversation:
Start young. As soon as kids can count, they can start to learn about money. Early on, use coin banks so they learn how to save, think about money and learn how to share with others. When they are a little older, open a savings account with them. Take them to the bank in person to set up an account and help them set a savings goal.
Use chores or allowances as a teaching tool. When kids are old enough to do chores for an allowance, you can teach them lessons about saving and responsibility. By creating a set dollar amount for chores, kids lean about the relationship between work and money. An allowance can also be a teaching tool, opening up the door to discussions about spending, saving and even investments and donations.
Introduce a budget. Creating a budget is one of the most important financial habits people can learn to develop. And it’s a great thing to teach kids because it puts financial decisions in their hands. With more experience thinking about and practicing budgeting, it can make it easier for kids to learn responsible money practices. Try the “50-40-10 system” for each allowance or birthday dollar received (save 50%, spend 40% and donate 10%). This concept helps kids understand the importance of categorizing money.
These are just a few simple steps to get you started. There are many ways to integrate financial education and skills into daily life. Just remember to make it fun, give them some incentive, and most importantly start early and your kids will be on the right track for an educated, financial future.
Trey Berkey is a financial representative with Country Financial in Medford. He can be reached at firstname.lastname@example.org.
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