Consumer Affairs Offers Parents Tools to Teach Financial Skills to Children

Monday, May 09, 2016 | 11:50am

NASHVILLE – On the heels of Financial Literacy Month, the Tennessee Department of Commerce & Insurance’s (TDCI) Division of Consumer Affairs offers summertime tips to help parents teach finance lessons to children and teens. 

“School doesn’t need to be in session for kids to receive financial instruction,” said TDCI Deputy Commissioner Bill Giannini. “Whether it’s a pretend grocery store, a lemonade stand, or a lawn mowing job, summertime offers children and teens great opportunities to develop financial skills like saving and money management.”


Understanding childhood development phases and how to access free kid-friendly resources empowers parents with the tools to teach financial lessons from beyond the classroom.

Here are the three childhood phases of learning financial skills:
 

Phase 1: Early childhood (ages 3 to 5)

  • Development of executive functions like self-control. Over time, children at this age learn about patience, planning and following instructions.

Phase 2: Middle Childhood (ages 6 to 12)

  • Development of financial habits, attitudes and values: frugality, planning ahead and resisting peer pressure.

Phase 3: Adolescence and Young Adulthood (ages 13 to 21)

  • Development of financial attitudes like “who am I as a money person?” At this age, youth begin making independent financial decisions.

Tips for parents:

  • Although taught in school, financial literacy begins at home.
  • Children should begin learning financial skills as early as age three. 
  • Teach financial literacy to a child as you would teach a new language. Children should be encouraged to learn new skills, practice those skills, repeat those skills and grow in understanding.
  • Teach financial lessons throughout every stage of life: childhood, adolescence and early adulthood. Financial skills should be woven into your child’s lifestyle.
  • Identify and utilize readily available resources: educational websites, local libraries, youth employment programs and social services.

Financial lessons for teens:

  • The benefits and risks associated with financial products like insurance, loans, credit cards, bank accounts and more.
  • The value of saving. How to save and invest at a young age. Creating opportunities.
  • The importance of budgeting and financial planning.
  • The concept of risk.
  • “Don’t believe everything you hear. Don’t do it just because your friends are doing it.”

Kid-friendly resources:

  • Avengers: Saving the Day is a free comic book offering parents a kid-friendly resource for teaching money management to children. Released by Visa Inc. and Marvel Comics in 2012, this action-packed comic book features a budgeting worksheet, finance terms and more. Download a free copy at www.practicalmoneyskills.com/avengers.
  • U.S. News & World Report recommends seven smartphone applications for teaching youth personal finance skills. Click here to learn more.

The Federal Trade Commission offers a variety of free financial education materials like Focus on Finances: Preparing for your Future. Visit www.consumer.ftc.gov for more resources.
 

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