How To Teach Your Children Healthy Financial Habits

May 13, 2022
Written by:
Sam Bowman

After graduating into adulthood, many public school students realize how ill-prepared they are for their financial futures. Financial literacy — including budgeting, taxes, and credit — simply isn’t part of the curriculum at traditional schools. As a homeschooler, you have the opportunity to give your children a well-rounded education that helps them develop healthy financial habits.

We’ll introduce some financial lessons and projects that you can implement in your homeschooling to help children develop a healthy relationship with money. We’ll also explain how your family can strengthen their education by getting them involved in financial decisions, even when school time is over.

Chat About Prioritization Spending

Generation Z has unique spending habits that will likely differ from your own. For example, while they’re prone to regretting their purchases, they’re also less likely than previous generations to take on large debts. Luckily, many members of Gen Z are highly receptive to the practice of prioritization spending. When you educate your child about the importance of prioritizing their purchases — and teach them how to do so — they can become more financially responsible.

One way to help your child practice prioritization is by having them do their own grocery shopping for a week. Give them a set amount of money to spend, perhaps requiring nutritious choices like veggies and fruits each meal, and allow them to freely spend the rest. Odds are, your child will start purchasing the essentials first and search for savings around the store, then practice prioritizing their own non-essential wants once they know how much is leftover.

Teach Smart Savings Habits

Alongside lessons about spending should always come lessons about savings. While Generation Z is likely to have emergency funds, as a result of growing up in the midst of financial crises, The Credit Review states that they’re unlikely to have significant savings. Teaching children to think long-term is key to helping them avoid a paycheck-to-paycheck lifestyle.

Have your child identify a long-term goal that they want to reach — for example, buying a laptop or a car. Show them how putting a little into their savings each month can help them reach their goals in no time. Consider opening checking and savings accounts for your child so they get more hands-on practice with smart spending and saving.

If you have an older child, you can even teach your child about investing some of their extra cash so its value doesn’t decline over time.

Create a Budget With Your Child

Creating a budget is a great way to give your child hands-on practice with prioritization spending and saving. Whether you’re helping them budget their own allowance or creating a mock budget, this can be a fun financial project that showsTeaching Teens Financial Literacy your child how their spending affects their savings, and vice versa. Your budgeting project can also open up the floor for children to provide their thoughts about what’s a priority and what’s not.

Start by having your child list out their essential expenses. While they may not be putting rent or utilities in their budget, they may include the cost of meals or school supplies. Then, have them dedicate a portion of their budget to savings and, if desired, set aside money for investments. Finally, work with them to allot money between non-essential categories, like toys or activities with friends.

Have Open Conversations About Financial Decisions

Giving children opportunities to put their education into practice is always essential. When school time is over, you can still encourage your child to think critically about their financial habits by having open conversations about money.

While finances were once rarely discussed, especially around children, families are increasingly recognizing the value of honest discussions about spending, saving, and more. When you show your child how you make financial decisions in the real world — whether you’re finding deals on groceries or shopping for a car — being fully transparent can strengthen your child’s viewpoint about money.

As you start to include your child in your financial decisions, your child will be compelled to involve you in theirs, as well. When they do, help them compare their options or weigh the pros and cons of their decision. Provide alternate perspectives — for instance, by mentioning the cost of video games if your child wants to buy a console — but take an unbiased stance so your child gets to fully practice smart decision-making.

Improve Your Child’s Financial Literacy

One of the biggest advantages of homeschooling is the ability to teach your children healthy financial habits before they go off into the world. It gives you a platform to discuss smart spending habits, savings, and even investment. Implementing hands-on activities (like creating a budget) during your school time and during family time is a great way to help your child grow a responsible mindset. Don’t be afraid to take a field trip to the grocery store and let your child decide what to buy.

More About the Author:

Sam Bowman is a writer who enjoys getting to utilize the internet for community without actually having to leave his house. In his spare time, he likes running, reading, and combining the two in a run to his local bookstore.


Additional Homeschool Resources

Teaching Homeschooled Teens Financial Independence

Educating Homeschooled Teens About Real Estate

Raising Your Child’s Financial IQ