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Building a Strong Foundation: Why Financial Literacy is Important for Kids

Financial, Money
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National Financial Literacy Month in April is a period dedicated to raising awareness of the importance of understanding and using resources related to money and investments. Financial literacy is an important skill that helps individuals make informed financial decisions and manage money effectively.  

While grown-ups genuinely must foster monetary proficiency, showing kids dealing with cash capably might be a viable method for keeping away from cash issues all through a lifetime.

According to Ellen Sabin, author of “The Nickels, Dimes, and Dollars Book: A Wise Kid’s Guide to Money Matters,” allowing kids to learn about money basics at an early age can have a significant impact on their future financial security. 

Sabin, the founder of Watering Can Press, claims that she has a valid reason for investigating this topic.

“Adults don’t really know how to talk about these topics, let alone model good behavior for kids,” Sabin told Fox News Digital in a phone interview. “Kids are watching and learning from us, and they’re picking up our habits and attitudes toward money. We need to be intentional about teaching them how to manage money and make smart financial decisions.”

Books like “The Nickels, Dimes, and Dollars Book” provide children with fun and engaging activities to help them learn about money management, which is one way to teach children financial literacy. The book includes real-world scenarios and examples that kids can relate to, and it covers topics like investing, budgeting, saving, and spending.

Through regular contacts and experiences, children can learn about financial literacy in another way. For instance, parents can get their kids involved in home budgeting by having them make a grocery list and keep to a spending limit when they go shopping. 

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Financial Advice: Encourage Children to Save

Parents can also encourage their children to save money by setting up a savings account and incentivizing them to save money for a particular goal, such as a new toy or a family vacation.

Teaching kids about financial literacy not only helps them develop good money habits early on, but it also sets them up for success in the future. According to a survey by the National Foundation for Credit Counseling, 64% of adults said they learned the most about personal finance from their parents. 

By teaching kids about financial literacy, parents can help their children develop a strong foundation of financial knowledge and skills that they can build on throughout their lives.

According to Sabin, elementary school is an excellent time to teach children about money. Kids in this age range tend to ask questions about money, which can be a crucial time for them to absorb important information. As kids are naturally curious, this can work to a parent’s advantage when trying to teach them about money.

Sabin suggests that parents should tailor the discussion of money to their kids, helping them see why they should care about the subject. Rather than talking about saving for college or credit cards, have children pretend they are parents and make spending decisions on “wants” and “needs.” This exercise can help kids understand the importance of making smart financial decisions early on.

Another effective way to teach children about money is through a “show-and-tell” strategy. This involves showing children how money works and explaining the various ways it can be used. For example, parents can show their kids how to make a budget, how to save money, and how to spend money wisely.

Parents can also use this strategy to teach their kids about different financial products, such as bank accounts and credit cards. By explaining how these products work and why they are important, children can develop a basic understanding of personal finance.

Furthermore, Sabin recommends using games to teach kids about money. For instance, parents can create a “store” at home, where kids can use play money to buy items. This game can help children learn about the value of money and how to make spending decisions.

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The Book About Money

Sabin’s book, “The Nickels, Dimes, and Dollars Book: A Wise Kid’s Guide to Money Matters,” offers interactive choices for kids, like drawing their own dollar bill and selecting their own important “needs versus wants” on the page. This helps children understand the difference between necessary expenses and discretionary spending.

Furthermore, parents should teach their children about strong, positive work ethics and how working can bring pay. Children can also be taught about budgeting, giving them the power to choose what to spend and not to spend. These life habits could impact a child’s well-being.

Watering Can Press, which is run by Sabin, has created a range of children’s books covering various themes such as the importance of having positive role models, embracing diversity, broadening one’s knowledge of the world, and surmounting obstacles. The company also provides a resource for parents and educators that delves into more profound ways of educating children about finances.

In conclusion, teaching kids about money is an important skill that can help set them up for financial success later in life. By discussing money in a positive context, using interactive choices, teaching about work ethics, and budgeting, parents can help their children develop a basic understanding of personal finance. 

Watering Can Press’s “The Nickels, Dimes, and Dollars Book: A Wise Kid’s Guide to Money Matters” and their guide for teachers and parents offer helpful resources for those looking to teach their children about finances.