Logan County Extension:
Help Youth Develop Strong Financial Skills

 

[July 16, 2018] 

During the summer schedules tend to shift and parents may have a little more time for different activities. Parents that have youth and teens in their life, may find summer an excellent time to promote the skills and knowledge youth will need to be good financial managers as adults.

Knowing we want to help develop positive skills and knowledge is one thing; being able to do it is another. Each individual comes with their own personality and approach to daily challenges. Parents are only one of many factors that influences children. Lecturing youth about what they should do or don’t do with money is probably not very effective. What can we do so that youth grow into adults with strong financial capability skills?

Pulling together research from many fields, there is now a new youth financial pedagogy that can help guide parents from the time their children are preschoolers through their late teens. Essentially the new framework suggests we help youth: 1) improve planning and problem solving skills, 2) create positive financial habits, 3) learn to compare and contrast choices, and 4) practice financial decision-making. More details information can be found about this at https://www.consumerfinance.gov/data-research/research-reports/personal-finance-teaching-pedagogy/.

How can parents put this into practice in their daily lives? First, from the time youth begin elementary school parents and adults can help youth develop planning and problem-solving skills. To manage money, a person needs to be able to plan, focus their attention, and remember details. In a similar manner, youth can learn to plan their day, stay focused on tasks, think before acting, and prioritize what they want to do.

To develop money skills, it can be helpful for children to have ways to earn money at home. Parents can consider developing a list of household chores they are willing to pay their children to do.

For young children, chores need to be manageable and ones that can be done relatively quickly. Examples:

• put old newspapers in recycling,

• clean the front of kitchen appliances, and

• folding towels.

Older children can manage more complex chores such as:

• wash a car,

• organize a hall closet,

• weed a flower bed, or

• tidy a junk drawer.

To save up money to buy something special, youth will need to plan how much work they need to do, stay focused on their goal, and prioritize between buying something “now” versus saving up for a future purchase. Keep in mind that “future” may be one or two weeks for very young children. By middle school, youth likely will be able to plan for spending in more than one category and be able to research their larger purchases to find the best match for their values and goals.

Take time to talk to youths about the difference between needs and wants. Explain how one’s values influence what they choose to purchase, and what they don’t.

Daily life provides lots of opportunities to talk to children about money and for them to practice money skills. Here are ideas to consider:

• While at the grocery store, have preschoolers help shop for items pictured on coupons. Talk about how coupons help save money.

• Older children can compare the cost of an eight-ounce serving of different beverages.

• Let a child plan a family outing or event that fits within a budgeted amount. Encourage creative ways to do fun activities with a small amount of money.

• If you have a larger purchase, ask middle and high school youth to research different options. Direct them towards trustworthy sources of information.

These type of activities help youth learn how to compare and contrast choices. Conversations about their activities will help reinforce positive financial habits.

Providing opportunities for youth to practice and learn about financial management means that they will become confident in their ability to achieve their financial goals, which is needed to be good financial managers as adults.

[Terri Miller, MPA
County Extension Director - Unit 16]
News Source: Kathy Sweedler, Extension Educator, Consumer Economics, [e-mail]