The best way to teach kids financial literacy is in the context of their everyday lives. Here's this month's teachable money moment:
In celebration of our kids going back to school, this month's Teachable Money Moment is brought to you by Math Class 101:
To show your child just how quickly things can add up, let's do a little arithmetic.
Multiplying by 12: Figure out about how much of the family budget you spend each month on, let's say, cable or groceries. Help your child multiply this amount by twelve. The result is about how much you spend yearly in that category.
Multiplying by 52: This time, figure out about how much you spend a week on a particular item at the grocery store. Maybe it's milk. Multiply this by 52. Again, that approximates your yearly total.
Seeing how much is spent on an item or category in a year is often an eye-opening experience and gives kids an appreciation for how much stuff really costs. Relate this to needs and wants. And remember, this is not an exercise to get kids to feel bad about how much you are spending; it's simply a way to get them to reflect on the importance of spending our money wisely.
BTW, parents, that four-times-a-
week latte you've been sipping in the afternoons? At $3.50 a latte, that adds up to $728/year!