ADULT MONEY HABITS are set by age seven, according to a 2013 Cambridge University study. Want to get your kids on the right track? Three things should scare the hell out of you.
First, parents teach kids about money all the time, often without knowing it. “Turn off the lights.” “Let’s go shopping.” “We will save if we have something left over.” It’s unavoidable. The subject of money is as omnipresent as the air we breathe. But that may not be the worst part for kids: Parents teach kids about money without the requisite knowledge. A 2015 Gallup poll showed two out of three adults around the world are financially illiterate.
Second, if parents choose to delay or ignore taking charge of their kids’ financial education, someone else will, including advertisers. Third, whether it’s borrowing for education or fun, it’s never been easier for kids to drown their dreams by going into debt. Benjamin Franklin would find today’s financial world astonishing. Teenagers, along with almost everyone else, can qualify for credit without income.
So where should parents begin? How do you teach kids about money at an early age? Here are four great field-tested strategies
1. Create slogans. Language is an enormous part of life. It shapes our thinking and feelings. Take time to determine what values you want to communicate to your kids about money. Then reduce those values to short, simple slogans. Personal finance books, blogs and Google searches can help. Three of my favorite sayings are “saving is a great habit,” “earning money is fun to do” and “spend slow and smart.”
2. Use storybooks and videos. Find ones that reinforce your money values. When using storybooks, bring the books to life by acting them out. Kids will love it and you will, too. Ask your children to repeat key phrases and concepts throughout the story. It keeps kids engaged.
3. Try songs. Music is a powerful learning medium. My favorite money song for kids is Get in the Habit. I may be biased, since I produced the song. Still, I am confident you will find the tune provides an excellent combination of knowledge and joy.
4. Use activities and games, including arts and crafts. One activity I enthusiastically recommend is creating a personalized savings jar. Use a transparent jar so kids can watch their savings grow. Write a goal on the jar, perhaps in glitter. Periodically, have kids shake their savings jar. Why? It’s fun!
Finally, keep in mind the following. First, there are no silver bullets. Mastery requires time and repetition. Second, learning is typically best when active. Third, there are no replacements for enthusiasm and authenticity. Kids will largely mirror your behavior. If you are enthusiastic, they will be enthusiastic. Kids will forgive a lot when they sense your message is genuine.
Sam X Renick is the driving force behind the “It’s a Habit” Company and its chief spokesperson, Sammy Rabbit, who is dedicated to improving children’s financial literacy. Sam has read and sung off key with over a quarter million children around the world, encouraging them to get in the habit of saving money.