April is financial literacy month, but that doesn’t mean you have to buckle down and read a finance textbook. Instead, Kate McKinnon is here to teach you (and your kids) what money is.
The SNL star teamed up with Beth Kobliner, author of the New York Times best-selling book Make Your Kid a Money Genius (Even if You’re Not), and three six and seven year olds to discuss why money really matters.
The video is hilarious, but it also introduces a good point: We need to start teaching our kids about money at a young age. Many parents believe that kids are too young to understand money, but that’s not true. By age three, kids understand some very basic concepts, including value and exchange. And by the time kids are seven, many of their money habits are already formed. But this shouldn’t discourage you, it should inspire you to start talking to your kids today.
After you watch the video, call your kids over and share it with them. You can laugh at the silly answers, but you can also use it to spur conversations.
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We asked Beth Kobliner about why it’s essential to talk about money with your kids, easy ways you can do it every day, and what topics you should talk about.
Why is it important to teach kids why money matters at a young age?
Money is the number one stress in most people’s lives. But, if you have conversations with your kids, you can relieve stress and debunk the myth that money is scary or overwhelming. Studies show that parents are much less likely to talk to their kids about money than they are other topics, such as drugs or alcohol. Money is a part of everyday life, so we need to talk about it more. Finance is also taught way less in schools than it was in the past. Only a handful of states require a personal finance course, so it’s really on parents to be the one teaching their kids. And if parents feel they don’t know a lot about money themselves, they can ‘fake it till they make it’. There’s no shame in learning alongside your kid.
How can parents teach kids about money every day?
It’s all about being aware of your actions and what you’re doing that day that involves money. If you go to the grocery store, explain to your kids why you prefer this grocery store over a more expensive one or whatever your decision process is. Be conscious of where you go with your kids. Just thinking about all the things in life that you do are almost always wrapped up in money. You should try to narrate that because it will be really valuable for your kids.
Let’s dive a little deeper into the topics in the video. What can parents say to explain the following topics to their kids?
Money is what we use to buy things. Those sneakers you have or that umbrella or that hat; those are all things we bought. Introduce your kids to coins and dollar bills when they’re really young. This helps them not only identify things, but also work on counting. You can also play a game of ‘What Costs More?’ to help kids understand value. Ask them to decide between a scooter or an apple.
As your kids get older, you can start to ask, 'Where does money come from?' Explain that we make money by working. You can point out people around you, such as the crossing guard or a teacher and how those are jobs. Be honest with your kids and tell them why you have to work, and what it means for your family. This can really make the ideas more concrete for a child.
2) Jobs and careers
Young kids don't get where money comes from. So, just saying to them that you have a job and go into an office is helpful. You can also take your kids to your office (if you can), so they know where you go.
For older kids, chores are another way to talk about jobs. I believe the research that shows that giving your kids chores around the house without paying them is good because it teaches them responsibility. So, you can explain that there are some jobs around the house, such as making your bed or emptying the dishwasher, you don't pay for because you’re part of a family. But it's okay to have one-off jobs, such as cleaning out the attic, that you will pay them for.
3) Credit cards
You should also treat cash and credit the same when it comes to your kid. If you buy something for your kid online, you should think about if you would actually buy it if you were in the store. If no, then maybe you should reconsider. And you can also ask your kid to pay you back. Some parents feel weird asking their kids for money, but it's actually a really good learning experience. It helps them consider if they really want to spend their own money. That's a way to show kids that credit cards are not free and that things cost money.
What’s one thing you want parents to know about teaching their kids money?
Money is a topic that makes people nervous and freeze up. The truth is that there are basic things you can teach your kids that are not all that complicated. They're lessons that last a lifetime. This video is an icebreaker for that because it's fun and it doesn't have to be terrifying. It's one of those subjects that are part of everyday life. If you're able to not get nervous about it, but just kind of laugh and learn, that’s one of the best ways to teach your kids about any topic, and in this case, money.