School's out for summer and the kids are basking in their laziness. I’m here to tell you, fellow parents, this isn’t exactly a good thing. Have you ever heard of the summer slide? Well, it’s a fact. It is common for teachers to spend extra instruction time at the beginning of the school year to help children who’ve lost skills and knowledge over summer breaks. On average, according to OnlineCollege.Org, children lose 2.6 months of math skills over the summer.
It's important to increase our children’s financial literacy, so why not keep their math skills sharp with a few lessons in Money 101? They will learn more about money and they will improve or even expand their math skills. Instead of depending on the television, tablets, phones and computers to babysit your kids this summer — use your off time to provide them with realistic money lessons and help them become more financially responsible.
Depending on your child’s age, determine the level of instruction suitable for them using the following guidelines and get started today. Summer will be over before you know it!
Activities for children 3 to 5
Children ages three to five have witnessed you using money, but many of them may not understand exactly how money works. These youngsters need to know how money is earned and the reason for earning money before they can master anything else. For this age group, I suggest practical lessons on how money is earned and how it is used.
Start by showing them simple ways to earn some money. You can do this by paying them for outdoor chores like helping you wash the car. Help them gather old belongings to sell at a children's consignment shop. If your child is feeling entrepreneurial, set up a lemonade stand in the neighborhood. Once they've earned some money, teach them that money is used for saving, spending, and giving to others.
Activities for children 6 to 10
If your child already knows how money is earned and the three main uses for it — up the stakes and introduce allowances, spending and savings plans. As you do these things, help them develop thoughtful spending habits. Around age 6, make sure you're teaching them how to add currency. This will help them with first-grade math problems during the upcoming school year.
Help them create a spending or savings plans based on their allowances or any other jobs they do for extra cash. Take them shopping with you and point out prices so they can learn how to make good purchasing decisions. If you go to the grocery store, give them a small list of grocery items and tell them their spending limit. This will help them learn how to shop with a purpose.
Activities for children 11 to 13
This is the age where things will get interesting. Kids pay attention to what adults are doing so take this time to introduce some real life money scenarios. Instead of paying the bills or creating your budget alone, involve your child. Children can learn a lot by participating in realistic adult money situations.
Show them a credit card offer and explain the terms. If you have a credit card, show them your bill and the reason it’s important not to charge more than you can afford. This will help them learn about interest rates, minimum payments, and debt. Open up your bills and have them write out the household budget for you. After they’ve finished, explain your bill payment system and provide insights on what works and what doesn’t.
Finally, start talking about college! Don’t wait until it’s too late to start preparing for college. If you don’t have enough in savings and will need to depend on financial aid, start looking for age appropriate scholarships now. Look at the costs of schools your child may be interested in going to and explain to them how much you can or can’t contribute towards their college education. This may motivate them to find more scholarships or work during the summer. If you have explained debt to them, they might be more inclined to explore alternatives that will help them avoid student loans.
Activities for children 14 to 17
If your child has mastered all the other topics taught in the other age groups, the teenage years are perfect for teaching them about long-term savings goals, retirement, insurance, and investing. At a young age, compound interest works in everyone’s favor. Explain how saving for retirement at an early age will actually help them save less and earn more in compound interest. Teach investing principles in a way that relates to them. If they’re interested in sports, research Nike stocks and create a faux-portfolio of stocks in different companies and industries.
Explain the importance of being financially responsible. Reinforce your lessons by helping them research, save, and purchase costly items, such as a car. Promote good saving habits by encouraging them to build a sufficient emergency fund before college. Teach them how to protect their identity by guarding personal information online and keeping their bank information private.
In Conclusion
Parents, I know you’re busy and it’s a challenge having kids at home during the summer while many of us work. However, just as we encourage our children in school and extracurricular activities, it’s important to make sure they know about money. Since your child needs to learn something this summer to prevent the dreaded summer slide, do your kid a solid by incorporating some of these money lessons into their activities.