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ID Theft Reporting Fraud Alert vs. Credit Freeze What is a Fraud Alert? How to File a Fraud Alert How to File a Credit Freeze How to File a Credit Dispute Monitoring Your Credit Report and Other Data Sources ID Theft and Fraud Prevention Resources What to Do If You Suspect Abuse Opting Out of Marketing Offers
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Identity Theft and Kids Financial Caregiving for Children Financial Education
Protecting Parents and Seniors
Financial Caregiving for Parents Elder Fraud Aging, Cognition and Finances “Difficult Conversation” eBook
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Elder Financial Abuse
Elder Financial Abuse Overview Types of Elder Financial Abuse Who are the Exploiters? Who is at Risk? How to Defend Yourself
Protecting Kids

Financial Education

It is extremely important for today’s children to be financially literate. “Gaining financial skills as a child provides better opportunities and makes you less likely to be taken advantage of,” says Ted Beck, president and chief executive of the National Endowment for Financial Education.

START EARLY

It’s almost never too early to start educating kids about finance. In an article in Forbes titled “11 Financial Words All Parents Should Teach Their Kids,” Jennifer Ryan Woods advises that you can start teaching kids about “savings” as early as 4 years old, and concepts such as budgets, loans, debt and interest at age 8. The earlier a child begins learning how to manage money, the better off they will be as adults.

IT’S A FAMILY AFFAIR

While there has been a recent push to include financial education in elementary, middle and high schools, only 37 states require courses in personal finance, and the quality and duration of those classes vary widely by jurisdiction. That means it’s largely up to parents to establish the financial foundation their kids will need to succeed.

Unfortunately, many adults have difficulty discussing money with children. A recent study by the Council for Economic Education found that one-third of parents are more comfortable talking with their kids about smoking, drugs and bullying than money. In order to help children navigate an increasingly complex financial world, we have to overcome this apprehension and simply get the money conversation started at home.

GETTING STARTED

There are many different methods of teaching kids about finances but most experts agree on the basics:

Talk about finances. Discussing money with your kids, including the money mistakes you may have made, is a great start. It’s the first step to helping children understand money and make responsible decisions about how to handle finances.

Encourage kids to save money. Teaching kids to save is essential and can start early with a piggy bank or a youth savings account.

Encourage kids to make financial decisions. It’s important to help children learn by doing, even if some of the lessons may be painful. For example, an allowance helps educate kids about setting goals, saving and spending. Once a child turns 18, they should apply for and get their own credit card. This will help them build credit and learn to spend responsibly. Also, have the child pay for the credit card—even if you, as the parent, are providing an allowance. It is important to learn early what it means to build credit and the consequences of missing a credit card payment or overspending.

RESOURCES

There are plenty of resources available to assist you in your efforts to teach your children money skills. Here are just a few: