Help Young Children Form Positive Financial Habits

parent and daughter putting coins into piggy bankGuest blogger and Iowa State University Extension and Outreach Human Sciences Specialist in Family Finance, Sandra McKinnon shares some compelling information on youth and financial literacy.

Children form financial habits at an early age. Parents and care providers can influence what those habits will be. University of Wisconsin-Madison researcher Karen Holden and colleagues found that habits children learn when they are young form the basis for their future behavior. A study from Cambridge University found that children form financial habits by age 7. We may teach our children that a dime is thin and worth 10 cents, but developing financial habits includes more than just recognizing coins. Parents and care providers can help children gain the knowledge and skills they need to develop positive financial habits.

The Consumer Financial Protection Bureau suggests teaching preschoolers these basic concepts:
You need money to buy things.
You earn money by working.
You may have to wait before you can buy something you want.
There is a difference between things that you want and things that you need.
Other concepts to establish good financial habits include learning about numbers, time and institutions, such as stores, banks or credit unions, and employers. Children also can learn about budgeting, regular saving and shopping strategies; social values, such as gifts, generosity and sense of community; and public goods like the library.

Another way to engage with children is by reading money-related books with children, and providing hands-on learning opportunities. Check out the following titles at your local library:

Sheep in a Shop by Nancy Shaw
The Berenstain Bears Think of Those in Need by Stan and Jan Berenstain
Just a Piggy Bank by Mercer Mayer
Just Saving My Money by Mercer Mayer
A Chair for My Mother by Vera B. Williams

The goal is to help children become comfortable with basic tools of how and why financial choices are made. For example, we can encourage pretend play, like a grocery store. Or we can explore careers by playing dress-up or acting out stories. In addition, we can talk about whether spending money on entertainment, for example, is a need or a want.

ISU Extension and Outreach human sciences specialists in family finance offer Preschoolers and Pennies: Read, Talk, Learn and Play, a 2-hour training for child care providers. Providers practice a way of reading with children that gives children an opportunity to become storytellers of books with a money theme. This introduces and reinforces money-related words and concepts in a more meaningful way. Complementary activities throughout the day encourage preschoolers to practice money skills.

Visit the Extension Store for the Allowance Game. Playing this game starts a great discussion on choices and consequences.

Barb Dunn Swanson

Barb Dunn Swanson

With two earned degrees from Iowa State University, Barb is a Human Sciences Specialist utilizing her experience working alongside communities to develop strong youth and families! With humor and compassion, she enjoys teaching, listening and learning to learn!

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The Language of Money

Parents reading a book with their daughterAs we continue our conversation with Human Sciences Family Finance Specialist Mary Weinand, she reminds us how important financial literacy is and even recommends a few children’s books.

I believe financial literacy is like any other language and like any other language we need to hear it often to understand it. Young children learn best by observing and mimicking adults. Our children may not understand the concept of credit, money, or savings but they are very good observers and they learn from us. This process is called financial socialization and research by the Consumer Financial Protection Bureau indicates that children form personal financial habits as early as preschool and these attitudes often carry into adulthood.

So how can we help our children learn appropriate financial behaviors?

Young children may not know anything about banks, credit cards, or money. But, they are very good observers. They have constant exposure to their parents and a desire to mimic their behavior, or the behaviors of the community around them. Research by the Consumer Financial Protection Bureau and others indicate that the personal traits, habits, and behaviors that lead to financial well-being in adulthood start to form as early as preschool.

Children as young as three begin to demonstrate self-regulations, persistence, and focus. They can use these qualities when using and managing limited resources like time, money, treats, or belongings. They have begun to develop basic values and attitudes around saving, consuming and early numeracy skills.

Parents are often the biggest and most positive influence of the financial socialization of their children. They can help their children by providing opportunities to learn and interact with money. Children learn important money lessons simply by watching parents earn, spend, save, share and borrow. Have children create shopping lists and help them to comparison shop and select grocery items. Include children in family financial decisions, planning, and saving for goals such as vacation and college education. And, model positive financial behaviors during everyday routines, such as comparing prices and products, and sticking to a shopping list. You don’t have to have a lot of money, in fact children often learn best when choices are limited and they can observe the difference between needs and wants.

Another method to introduce children to the topic of money is through books. It is often easier to be more objective when talking about book characters and their money decisions. After families talk about what the characters could do, adopting some of the same financial concepts into their own lives is easier too.

And, parents do not need to be money experts. Many of the building blocks for good financial decision making—like patience, planning, and problem-solving—do not require a lot of financial know-how. Some good book choices are; The Berenstain Bears’ Trouble With Money, (Stan & Jan Berenstain), or A Bargain for Frances, (Russell Hoban). These books help express important financial topics such as problem solving, savings, earnings, and self-control.  A great resource for families and libraries is the Money as You Grow Book Club guide which provides several family activities and more reading suggestions.

To learn more about family finance information, contact any ISU Extension and Outreach county office to be connected with a human sciences specialist in family finance.

Barb Dunn Swanson

Barb Dunn Swanson

With two earned degrees from Iowa State University, Barb is a Human Sciences Specialist utilizing her experience working alongside communities to develop strong youth and families! With humor and compassion, she enjoys teaching, listening and learning to learn!

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Keep it Fiscally Healthy this Holiday Season

 Guest blogger Mary Weinand, Human Sciences Specialist, shares some important helpful ideas for fiscal health this holiday season.

parent and daughter putting coins into piggy bank

Each year at Holiday season we are flooded with articles and advice on how to “stay healthy” with all the choices we have and the opportunities to overindulge. Well, the advice we hear to maintain our physical health is useful for our fiscal health as well. This is a great time of year to take the opportunity to share healthy financial choices with our children.

Provide Healthy Choices

Discuss things your child enjoys that are free, such as playing with a friend or going to the library. Teachers report year after year that it is not the toys their students remember but the time they spend with their families. The card games and puzzles, the snowball fights and family meals are important healthy financial choices. A good book on this topic is, “Alexander who used to be Rich Last Sunday” by Judith Viorst. You can talk to your child about all the ways Alexander used his money and more importantly …was he happy with his choices.

Portion control

Many health advisors remind us to manage our portions to minimize over indulgence. This Holiday season take the opportunity to think about ways we can talk to our children about spending plans. How much money do they have and how do they plan to spend it when buying gifts for the family. Remind your children about added expenses like taxes and work with them to think about ways to stretch their dollars. Show them how to comparison shop and emphasize the gift of time. Promising to rake leaves and shovel driveways would be greatly appreciated by many family members. A good book to read together is, “Sheep in a Shop”  by Nancy Shaw. Ask your child if it was hard for the sheep to decide and how did the sheep solve the problem of not enough money?

Set Realistic Goals

When setting health goals we want the goal to be realistic and manageable and the same applies to finances. Young children may be confused about delayed gratification and buying gifts for others. It can be difficult for children to give a gift they may want themselves. Talk to your child about things that take time, plant some seeds in a cup or in a garden, and wait for them to grow. Together, take care of the seeds to help them grow. Or, sit down as a family and create a “family fun” list for winter, spring, summer, and fall. Write down all the activities that your family likes to do together. Some activities are free, like going for a walk or playing a game, and some activities cost money. A fun book to read together about realistic goals is, “Curious George  Saves His Pennies”  by Margaret and H.A. Rey

For more ideas or book suggestions about money, refer to the “Money as You Grow Bookshelf” by the Consumer Financial Protection Bureau. Additional family finance resources available here.

Barb Dunn Swanson

Barb Dunn Swanson

With two earned degrees from Iowa State University, Barb is a Human Sciences Specialist utilizing her experience working alongside communities to develop strong youth and families! With humor and compassion, she enjoys teaching, listening and learning to learn!

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Family Finances in the New Year

As the New Year approaches, are you writing down some goals or resolutions? Each year, I try to identify one or two new things I want to try, or do differently. I often use the beginning of the New Year to adjust my savings strategy so that I can also meet my goal of having some funds to be able to travel and visit my family when summer rolls around.

This is also the time of year that I have to pay the bills for the gifts that I purchased during the holiday season. Having a spending and savings plan is important.  Children learn so much from watching how other family members and friends use money. As adults we can model good spending habits, and educate our own children so that they will develop good consumer management skills. You may be curious about what resources are available to help you teach your child about how money works or how to be a good money manager as an adult. I would like to suggest you explore the following links:

Wishing you and your family a great and prosperous New Year!

Barb Dunn Swanson

Barb Dunn Swanson

With two earned degrees from Iowa State University, Barb is a Human Sciences Specialist utilizing her experience working alongside communities to develop strong youth and families! With humor and compassion, she enjoys teaching, listening and learning to learn!

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Gift Giving at the Holidays

As the holiday season approaches, many of us find ourselves looking at the calendar and making checklists, of things that require our attention, like baking; cleaning; holiday school programs, and gift shopping.

If you are someone who has a list of people that you shop for at the holidays, then this time of year is a busy one for you. Depending on who you are shopping for, the gift buying experience can be stressful. You may wonder if you have saved enough money to buy all the items on your gift giving list. You may also be filled with stress trying to find all the requested gifts your children seem to have this time of year.

Research reported in the Journal of Consumer Research has found that for many, it’s better to provide an experience, than just a gift itself. In fact, the research suggested that these experiences may in fact strengthen relationships between people! During the holiday season, instead of giving gifts that may need to purchased, wrapped and delivered, maybe we can re-think our gift giving strategy. What if we were to give a skill or a helping hand to someone we care for?

Could we offer our TIME, to wrap someone’s holiday gifts? Could we offer to address Christmas cards? Could we offer to go to the grocery store or shopping mall and shop alongside someone who may need extra time or attention? Consider spending a day at the senior center and visiting and listening to the stories of the residents. These are the priceless gifts of attention that so many of us can give, and others will certainly appreciate.

Don’t forget, caregiving can be the special gift you give to your family this season. Focus on helping your family members eat healthy; get plenty of sleep and exercise during the holidays! The caregiving we show to one another today will be repeated for the good of all for years to come. Stay in touch with Iowa State University Extension and Outreach your Human Sciences Specialists for information on family finances; nutrition and wellness and caregiving. Happy Holidays!

Barb Dunn Swanson

Barb Dunn Swanson

With two earned degrees from Iowa State University, Barb is a Human Sciences Specialist utilizing her experience working alongside communities to develop strong youth and families! With humor and compassion, she enjoys teaching, listening and learning to learn!

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Enjoy Summer Garden Bounty

It is summer time and I am thinking about foods that we find plentiful in the garden. Sweet corn here in Iowa is something to treasure. Our gardens are also bountiful with tomatoes; lettuce; squash; beets; potatoes and so much more! Harvesting each of these delicacies and finding delicious ways to prepare them, may be more challenging for us! Do your children find the foods I just mentioned, appealing? If not, it may be because they are foods that have not been on the dinner plate lately!

Introducing new vegetables, especially when in season, is one way to help children learn to enjoy and consume these healthy foods. I want to encourage you to take a peek at our Spend Smart Eat Smart website! This site is full of delicious recipes your family will want to try! In addition to recipes, this website features videos and information to help you when you are shopping, including unit pricing!

We have even launched an APP – for Spend Smart Eat Smart, so that you can access the site from your smart phone, while you are grocery shopping for your family. Happy eating to you and your family this summer!

Barb Dunn Swanson

Barb Dunn Swanson

With two earned degrees from Iowa State University, Barb is a Human Sciences Specialist utilizing her experience working alongside communities to develop strong youth and families! With humor and compassion, she enjoys teaching, listening and learning to learn!

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Gift and Giving

christmasgiftboxWelcome guest blogger, Carol Ehlers, Human Sciences Specialist, Family Finance for this months topic on “Gits and Giving”

Simple Christmases that are low on cost but high on meaning are possible. In fact, a $10 limit per person is possible by carefully planning holiday spending.

The first step to achieving a small holiday limit is to make the decision to hold down spending. Tell relatives and friends you’re choosing to set a budget for exchanging gifts. This can be hard to do, but you may find that keeping holiday spending down can pay off in some unexpected ways.

Next, decide how to spend the budgeted Christmas funds. Will some be spent on the adults, or will it all be spent on the children?

Be creative by giving “low-cost experiences.” Many studies show that material possessions do not equal happiness and that experiences are much more intrinsically fulfilling than things. A Cornell University 10 year study and Journal of Psychological Science report confirm why experiences have the ability to contribute to happiness more than material purchases. Successful low-cost experience examples range from pottery making, rock climbing, horseback riding, bowling or skate tickets. Consider “Every Kid in a Park” (a free year-long national park pass https://www.everykidinapark.gov/ or geocache treasure hunts that end with ice cream. Consider sharing a skill or classes to experience sewing, painting or other similar activity. To keep it low-cost, find a family member, friend or community event to teach the skill at a discount.

Proven family focused gifts range from museum or science center memberships–to orchestra or community theater tickets– to a tent for camping. Sometimes a material gift can lead to an experience.

Families who have tried this low-cost Christmas have found it was more meaningful. Families that keep to their Christmas budget plan enjoy the feeling of financial security knowing there won’t be large bills to try to pay in January. There is also a good chance those inexpensive and thoughtful gifts will bring out the best in everyone and will be more meaningful.

 

We would love to hear about your inexpensive gift ideas! Share with us!

For more ideas download a free copy of ISU Extension and Outreach publication “Track Your Spending,” or “This is the Way I Spend My Money” a 12-month spending record.

Lori Hayungs, M.S.

Lori Hayungs, M.S.

Mother of three. Lover of all things child development related. Fascinated by temperament and brain development. Professional background with families, child care providers, teachers and community service entities.

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