As a new school year approaches, many families face new expenses, including school supplies, technology fees, and extracurricular activities. However, only 25% of U.S. parents who live with children report discussing finances with their kids, according to a recent survey by Forbright Bank.

Teaching Financial Literacy

Parents can help their children develop healthy financial habits by having open and honest conversations about money. These conversations can start with simple lessons, such as teaching younger kids about different denominations of bills and coins and how to count and divide money.

Older kids can learn about the power of compound interest and how to set weekly or monthly savings goals. Parents can also encourage their children to save money by offering a small allowance tied to specific chores or by helping them set aside a portion of their earnings from a part-time job.

Discussing Spending and Budgeting

As kids gain more independence, they may be tempted to spend money on non-essential items, such as snacks or entertainment. Parents can help their children make smart financial decisions by discussing their expectations for spending and budgeting. This can include setting limits on mobile wallet spending or encouraging kids to save for long-term goals, such as buying a car or paying for college.

Parents can also share their own financial decisions and explain why they make certain choices, such as choosing to buy more expensive laundry detergent because it has fewer harsh chemicals. By being transparent and open about their own financial habits, parents can help their children develop a healthier relationship with money.

Protecting Against Financial Scams

Kids are not immune to online financial scams, and parents should take steps to educate them about the dangers of scams and how to protect themselves. This can include teaching kids to be cautious when receiving unsolicited messages or emails and to never share personal financial information with strangers.

By having these conversations and teaching their children about financial literacy, parents can help them develop the skills and knowledge they need to make smart financial decisions and achieve long-term financial stability.

Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.