Skills Children Need Before Leaving the Nest: Literacy

This is the second post in a series of blog posts on what skills children should learn before they leave their parents’ home and go out into the real world.

If you missed the first post, you can go here – Skills Children Need Before Leaving the Nest: Communication 

Financial Literacy Skills

I think financial literacy is one of the most important skills children should have, let alone adults.  Here are some ideas that we have implemented and some that we plan on doing:

• Comparing prices – Before my children want to buy something, I have them check the prices at Walmart, eBay, and Amazon, and any other websites.  They also have to read the product reviews and any return policies.
• Budgeting – Create a budget to manage cash and a checking account.  With technology these days, our children are using software to track their income and expenses.   They learn to reconcile their accounts and run reports to see where their money is going.
• Compounding – We show our children how much money they are getting when they put their money in an interest-bearing account.  In contrast, we show them how much money they are losing when they don’t pay off their balance on a credit card.
• Saving for retirement as soon as they start working – Give them an example of two people contributing to an IRA where one starts contributing $3000 immediately for 10 years and then stops, letting his money sit there.  Meanwhile the other person waits 10 years and contributes $3000 every year until retirement.  Guess who will have more at retirement?  (Answer: the first one)
• Emergency fund – save up 3 to 6 months worth of living expenses in case of any emergencies that come up unexpectedly

Please comment below and let me know what other things we can do!

Stay tuned and find out what the other 2 skills your children will need to know before leaving the nest…

photo credit: pfala