Financial literacy is the ability to understand money, how it works, and make smart decisions with it. 78 percent of US workers live paycheck to paycheck to make ends meet; less than a third of workers stick to a clearly defined budget; and 56 percent of workers save $100 or less each month. A study done by the Federal Reserve showed that financial literacy knowledge didn’t increase with age, but higher education levels and a higher household income did show a patterned of increased financial literacy. These statistics are frightening, and future generations will be at a great disadvantage if financial literacy isn’t more widely accessible.
As a community bank, we feel it is our duty to empower our customers and their communities with learning tools and easy access to financial literacy. Teaching children about financial literacy can start as early as you want it to. There are so many fun way to teach children about money! We wanted to share a few ideas for families to help incorporate financial literacy at home.
- Sorting money-even the youngest family members can help sort money, this helps children with matching, the names of the different coins, recognizing the physical differences in coins, and paper money denominations.
- Counting money-younger children can learn the values of coins and paper money, older children can learn to count money and to count change back!
- Balancing a check book-if you can add and subtract, you can learn how to balance a checkbook! This is the chance to teach the concept of a check, the roll that each party plays (the payee, the payer, and the bank), and how a bank account works.
- Creating a budget-living by a budget is the most important step in taking control of your money and making smart decision with it. Children of all ages can talk about needs and wants, prioritize budget items, and see what it takes to run a household. Older children can create their own budget then put it to practice in real life!
We hope you find these ideas helpful. There are so many ways you can teach financial literacy at home! If you try one of these activities at home, send us a picture of your kids to firstname.lastname@example.org to be featured on our Facebook page!