A solid financial education for kids starts with cultivating characteristics that will support a successful money mindset and less reliance on spending.
Financial literacy and money management are crucial topics for young people. Talking about money openly in your home, instilling an appetite for saving money for the future, and particularly college savings, are crucial topics for teaching kids about money.
But starting at an even younger age (we’re talking financial literacy for Kindergarten here), there’s a lot to be said for teaching kids life skills that will lay the foundation for being successful with earning and managing money down the road. In short, a financial education for kids is not all about learning budget skills, the pillars of personal finance, and credit score formulas. The bedrock stuff to teach young kids is a lot more… holistic.
Here’s a list of six life skills that will help your child be a successful earner and money manager, but have very little to do with money.
What's In This Post
1. Confidence
Instilling confidence is a critical foundation for success in life, including financial success. Our kids must know they are capable to learn new things, make mistakes and overcome, seek out help, defy peer pressure. In short, they must learn to have confidence in themselves. When it comes to choosing a challenging educational path (that will pay well!), or putting oneself out there to start a business, or negotiating a higher salary, all of these critical steps to earning money rely on healthy self-confidence.
While everyone else is buying a new car out of college, will your kid be lulled in as well or hold steady in their choice to muddle through so they can build their savings account first? When they mess up taking out a loan they probably shouldn’t have, will they know they can come to you for help to solve it or will shame keep them from getting a plan of action in place? Since confidence in trying, learning, and failing and recovering starts early in life, this part of financial education for your kids is one to focus in on no matter your little ones’ ages.
2. Cooking
I’ve been a miserable failure at cooking for my entire adult life. But as I’ve finally picked up some basic skills, I realize just how darn valuable this life skill is. For me, it started by watching The Chew, a daytime cooking/talk show that was excellent at teaching when you watched it regularly. It’s not on anymore, but perhaps you can stream it somewhere for lighthearted cooking training!
We skipped grocery shopping last week because of a busy work weekend, and I actually came up with 4-5 from-scratch meals that week with things in the back of the pantry and freezer, instead of spending $100-150 on Instacart or ordering out. Miraculous!
I think a lot of us learn to follow recipes, but very few of us learn to actually cook. Knife skills, the elements of a soup or sauce base, various methods to quick prep fresh vegetables, and more. These super basic skills will prevent your kid from spending their meager earnings during their 20’s on take-out dining.
Whether it’s investing in some quality classes, some books, or following a YouTube channel (or old daytime cooking shows!), something that will teach kids how to make a meal without a recipe seems worth its weight in gold. And how awesome if your kid is the one who is one day capable of creating a fabulous date night dinner for their sweetheart at home instead of dropping $100 at a so-so “fancy” restaurant?
3. A DIY, can-do mindset
So many mistakes with money happen in those early adult years when you’re trying to make it on your own for the first time. You gotta buy all the things, spend, spend, spend. And the only way to get it done sometimes seems to just saddle up with debt. Free financing at the furniture store? Sure! A monthly payment from the car dealership that fits with your new salary? Excellent. Oh no, now that car needs routine oil changes, brakes, and tires? Grab the credit card.
There are incredible resources online full of free, do-it-yourself info to empower us to spend less and do more. Make sure your kids see you learning and trying new things and prioritize teaching them some basic DIY skills.
My husband told me he wasn’t handy when we met. But I have observed time and time again how he naturally just figures things out. He jumps on YouTube for some plumbing know-how. Or asks one of our dads for some carburetor or electrical repair input, whatever the case may be. And as the years have gone by, I’ve realized he was regularly pulled into the mix from his own parents doing things around the house. So even though he didn’t know how to do everything, he was familiar with the concept of learning and trying.
I couldn’t count the number of walls I’ve watched my mother repaint, including through the 90’s when painting was all about sponges and rag rolling, not to mention removing all the wallpaper of the 1980s. It never occurred to me to hire these things done, because I was so familiar with the process from watching her growing up.
When I was in grad school, I had an electrical problem in my car. I had a quote to have it fixed by the local mechanic. But I also checked around on Google, found a company to order the faulty part and some directions to replace it. What the heck? I ordered the new relay, followed the instructions, and waddya know, I repaired my own car for less than $50.
As a couple, we’ve adopted the DIY mantra of, “As long as we don’t burn it down, it’s fixable.” In other words, why not try it ourselves before seeking out a contractor? What’s the worst that can happen? (Answer: fire) But as long as it’s not fire, worst case scenario you end up hiring someone anyway. Most of the time I’m quite confident we do a better job than most contractors because we’re so careful to learn and take it slow. This approach has saved us many thousands of dollars over the years.
Growing up with a can-do attitude can help you save a lot of reliance on others (and money) later in adult life. If your kids know they can grab wood furniture off Craiglist (or the side of the road) and turn it into a custom piece for their house, they’ll never be tempted by those terrible furniture store financing deals! And if they know they can replace a sink faucet and light fixture (or atleast know they can learn to do it), they won’t turn away from good starter houses that just need some cosmetic updates.
Even if you’re not handy, it’s never too late to learn some things. Take free classes as a family at Home Depot, sign your kids up for creative skill-focused summer camps, pair them up with a friend or neighbor who does projects a lot. There are many ways to instill some can-do in our kids. And we must to lay this groundwork as part of a solid financial education for our kids.
4. Consumption vs. conservation
A healthy dose of tree hugging is good for battling consumption craze. Do your kids understand where ‘stuff’ comes from? What happens to it when they don’t want it or it breaks? Some knowledge and respect for the resources required to make the stuff we buy, the money spent to bring it home, and where all that stuff goes in the end will go a long way.
Children are natural nature lovers. So when all their stuff gets tied back to strains on the Earth, they tend to think quickly about how to conserve more and consume less. You can connect how the three R’s they learn in school (reduce, reuse, recycle) are just as good for their future bank account as the Earth’s resources account. When they see you repurposing things, instead of going straight to dispose and consume some more, they’ll have a foundation to minimize their own consumption as they grow up.
5. The old fashioned way
As Millennial parents, we have to go the extra mile to teach kids about simple ‘old fashioned’ ways to get things done. If our kids grow up thinking smart phones are the only way to find a new address or answer a question, they will overvalue such devices and undervalue their own abilities.
While we (senior Millennials I guess) might have a healthy perspective on these conveniences, our kids run the risk of being absolutely dependent on them. No wonder they’re happy to spend $1,000 on a smart phone when it’s that crucial to do anything in life. That is a ton of money! And not that many years ago, none of us had these devices.
But today’s children have known no other reality and observe us constantly attached to our phones. Make sure your kids understand picking up a phone to dial a number and call a human to ask a question. Ensure they can pick up physical, hold-them-in-your-hand resources at the library to learn about a subject or skill. Teach them to use a map and directions to locate an address. Put them through the paces of using a bus schedule.
Even though these things seem incredibly basic, they may not be to these next generations. Our kids are growing up in the era of Siri, Uber, Instacart, Waze, and DoorDash after all, not phone books. And this form of ‘creative improvising’ is an all around good skill to have in any situation. From survival skills in the woods to finding your new workplace address after your smart phone dies, learning skills to creatively problem solve and improvise are super important for financial success.
Just imagine that latter scenario. Your kid is going to a new job interview, but their phone dies or breaks. They give up and drive home because they have no way of getting there. No second interview. No sweet new job.
Seriously?! No!! But you know as well as I that this could definitely happen without learning some basic skills as part of a financial education for kids. If they were trained to write a few things down on actual paper, like a phone number or address for an important location (like for a job interview), and kept an atlas in their car, this would be a non-issue. Stop at a gas station and call ahead if you got lost and will be late. While you’re there, grab a map or ask some directions if you don’t have that handy atlas. And then carry on, crisis averted. Which scenario will your child end up in? Let’s make sure they have those simple skills in place to be successful.
6. Gratitude
This one is probably the most powerful piece of bedrock for a financial education for kids. Money problems are generally spending (which turns into debt) problems. When we emphasize thankfulness for all we have, no matter how little, we direct the mind towards appreciation instead of wanting. If we let the wanting take over in our kids, there will be a constant drain on their cashflow. And the debt will come next. And this is to say nothing of the unhappiness a life without gratitude breeds.
Make a daily practice of identifying things you are thankful for and ask them to think of something as well. Or just make sure to use language in daily life that expresses appreciation and not more wanting. Little kids might not have the deepest answers to what they are grateful for, but you’ll be modeling thankfulness and getting them thinking. Their understanding of gratitude and appreciation will grow and deepen over time with that consistent leadership. Ultimately, letting go of “I deserve more” and replacing it with “I am thankful” changes your financial outlook entirely, irrespective of the dollars involved. What a gift for our kids.