Financial Literacy – The Early Years

By Hanna Kaufman

April is National Financial Literacy Month, and what better time to address financial education? Financial literacy focuses on developing the skills to make informed money management decisions. While increased financial education would be beneficial for all age groups, like many things, it’s best to start sooner rather than later. By introducing the concepts early on, you can help lay the foundation for a financially healthy life.

Financial education begins at home. While standard 4-12 education introduces the concepts of counting coins and other basic personal finance building blocks, the responsibility ultimately falls on the parents to ensure your children are prepared to face financial decisions throughout his or her lifetime. For most, this is a very stressful thought, discussing financial matters with children is never an easy task, but hopefully we can alleviate some of those concerns with the five tips below:



Long-term money habits are developed at a young age! The more your children learn now, the better equipped they will be to engage in positive financial behavior in the future.  Teach your children the fundamentals of saving and watch them grow living a healthy financial life with increased financial literacy.



Many financial concepts are complex and difficult to grasp, be sure to take it one step at a time. Attempting to cover too many financial concepts at once will ultimately lead to a confused and discouraged child.  It’s an abstract and confusing topic, find ways to illustrate the process or compare new concepts to familiar ones. A few examples include:

  • Utilize a clear jar- This is a beneficial tool to simplify savings. It will allow your child to visually see how much they are accumulating. Taking this one step further, you could develop a system of multiple jars with labels for children with more than one savings goal.
  • Create a savings vehicleSet up a child savings account with online access. The online access easily displays incoming and outgoing funds, which introduces the concept of cash flows. It will also begin to establish a level of responsibility around money.



Finances? Fun? Believe it or not, there are plenty of ways to make financial lessons fun and engaging for your children or grandchildren. Financial education isn’t intuitively fun; however, finding a way to excite your children about finances will make this process that much easier. A few examples include:

  • Set savings goals – This makes a somewhat dull concept into something your child can get excited about. Is there a game or toy that your child is excited about? This is an excellent opportunity for your child to develop a practical understanding of what a saving goal looks like.
  • Utilize technology- Does your child enjoy playing on a tablet, computer or smartphone? In this case, it could be advantageous. There are countless apps and other interactive downloadable games to introduce your child to money management.


REPEAT, REPEAT, REPEAT (& do it again):

Financial knowledge is likely to weaken as time goes on if it is not reinforced habitually. To establish healthy habits for your children, this must be an ongoing process. It’s important to emphasize that these lessons should occur on a continuous basis, not just in April. Like anything else, to create the habit, you need to be consistent and repetitive.



Finally, it’s important to remember that you are your child’s biggest role model; they notice your spending habits. Whether you’re impulsively buying or comparing prices before making a big purchase, they are going to notice. What better way to teach your child about finances, than by setting an example for the behaviors you’d like to see them do? Practice what you preach!

You play a very important role in your child’s financial wellbeing. By introducing basic concepts of personal finance at a young age you can establish the foundation for a healthy financial future. Keep these tips in mind and instill financial confidence in your children (or grandchildren) that they will carry throughout life. Don’t wait, it’s time to share these valuable lessons and remember, we are always here to help!