3 Ways to Raise Your Kids to Be Wise With Their Money (Hint: It Starts With Math Confidence)

Jun 7, 2021 | Burlington

The level of financial literacy in the United States is surprisingly low, according to various studies. Unfortunately, most Americans, especially younger individuals, have a poor understanding of not only money in general, but also important financial skills, like budgeting and investing. One study by the US National Financial Capabilities found that most Americans score an average of 53% on a standardized set of questions on financial literacy. 

 

So, how can you raise your child to surpass these statistics and be incredibly wise with their money when they're older? Well, it starts with math confidence. Here’s why math confidence is so important for financial literacy, along with 3 ways to raise your kids to be smart with their money in the future.

Financial Literacy is Directly Tied to Math Confidence

It shouldn’t be a surprise that the more confident your child is in math, the more they’ll understand and be wise with money. But, here’s some findings from a few studies to further prove this fact. 

 

  • Students with higher levels of math confidence have higher rates of financial literacy than students with lower levels of math confidence. (Source)
  • Students that are above average in their math ability score higher on financial literacy exams. (Source)
  • Low numeracy is associated with a 4.8% reduction in financial literacy, while a high level of numeracy is associated with a 5.6% increase. (Source)

 

Nobody can wisely manage something they don’t understand. Making wise financial decisions involves making correct mathematical calculations. So, if someone’s mathematical skills aren’t the best, it’s inevitable that their financial decisions will be negatively impacted. 

 

If your child needs some assistance with their math confidence and abilities, don’t forget that our Burlington math tutors are here to help. 

3 Ways to Raise Your Kids to Be Smart With Their Money

Although it may seem like a daunting task, raising your kids to be smart with money is actually quite simple. Here’s 3 easy ways to do so.

Regularly Talk About Money

One of the best ways to prepare your child for financial success is by simply talking with them about money. Young children especially are always listening and rapidly absorbing knowledge. So, it’s important to start talking to them about money, budgeting, and even investing while they’re young. Even if your children are older, it’s never too late to start having these conversations.

 

All throughout their time in your home, be sure to regularly involve them in conversations like budgeting for the month, investments, paying off debt, and saving for new things. Also, be sure to ask them for their opinions. (You obviously don’t have to implement their suggestions, but asking their opinion requires them to think more deeply about the conversation.) For younger children who may not understand such conversations, have them count out money for small objects at the store and work with them on their money counting skills. Doing this step alone will make a huge difference in preparing your child for financial success. Unfortunately, less than 40% of parents include their children in conversations about money, so your child will definitely be one step ahead of the game.

Help Your Children to Actively Budget Their Money

Introduce your child to the concept of budgeting young, and actively check in on the budgeting habits of your older children. 

 

For younger children, provide them with an allowance, if possible, and have them set up some sort of visual way of saving money. For example, your child could decorate and establish 2 jars: one for savings and one for spending. Everytime they receive money, help them to determine how much should go into each jar. Also, discuss with them how much of their spending jar should go towards certain items, such as a toy they might want, or how to save their money for something big. It might also be smart to have them keep a detailed record of their deposits and withdrawals to also teach them bookkeeping skills. 

 

For your older children who will definitely grow out of the jar system sooner or later, help them take the next steps by opening a bank account, obtaining a debit card, and creating a basic budget. As they stop receiving an allowance, start receiving income from a job, and start gaining expenses, like gas or entertainment money, take time to review their budget every so often with them and check in with them to make sure they’re sticking to it. Be sure to talk with them about saving for things like a car, college, or a new device they might want, and about setting aside a portion of their income for savings. 

Prioritize Their Math and Critical Thinking Skills

Like all the countless studies show, the more advanced your child’s mathematical abilities and understanding is, the better they’re financial literacy will be. So, it’s important for you to prioritize the development of your child’s mathematical skills. 

 

Stay actively involved in your child’s education to ensure that they’re always ahead, and never behind, in not just their math skills, but all skill sets. Also, don’t keep your child’s education just in the classroom. Be sure to review concepts they’ve learned in school at home and incorporate education into everyday life, with things like trips to the science museum and discussions at dinner. In doing this, your child has a far greater chance of being financially successful when they’re older. 

 

RELATED: Fun Ways to Keep Your Child’s Math Skills Sharp This Summer

Does Your Child Need Help Sharpening Their Math Skills?

If your child is behind in math, our math tutoring center in Burlington, NC is here to meet them where they are and take them where they need to go to gain math confidence. Using our proven Mathnasium Method, we will help them to overcome mental blocks and truly excel in all areas of math. We’ve helped tons of students develop an understanding and love of math, and we’d love to do the same for your child.

 

Give us a call or text us at (336) 792-7000 to schedule your free trial today, or don’t hesitate to reach out with any questions or concerns.