• Milagros S. Johnson

Now is the Time to Talk to Children About Financial Literacy

For some parents, it is the forbidden topic around their children. Be that as it may, perhaps they never learned about it when they were children. They do not know when or how to start the discussion. Or they themselves have no concept on how to manage it.


I am referring to MONEY! Financial Education. Financial Literacy. Money Management. Call it what you want. It boils down to one word, FINANCE. There is no better time than now to teach our children about Financial Literacy. Here’s why.

We are currently experiencing the consequences of an economic turmoil resulting from the COVID-19 pandemic. The crisis is creating financial havoc all around us. Many parents are finding themselves unemployed, not knowing how they will pay their: 1) mortgage or rent, 2) utility bills, or 3) buy food for their family. These three items are necessities. Better yet, when this point is reached, it is referred to as, “Going into survival mode.” To make matters worse, many individuals do not have an emergency fund to tap into during this economic crisis.


Currently children are out of school for an extended period of time, with many being home-schooled or doing distance-learning. Many parents are working remotely due to social distancing or business shutdown. Either way, this is an exceptionally perfect time for children to learn about the importance of being prepared for a “rainy day.” I think it is fair to say that most of us can relate to a “rainy day” at this very moment.

If you are presently working from home, engage your children in a conversation about your work, and allow them to observe and listen (if and when it is appropriate). When you tell them that you are working, they may not understand what this means, besides not being available for them. Your children will likely be interested to learn about the work you do to earn your money.


Next, explain to them that this is how you earn your money/paycheck. Keep in mind that most children believe that the ATM machine freely gives away, or “spits out “money since this what they mostly see, or your swiping a credit or debit card when buying goods.

Do you ever wonder why children develop the habit of constantly asking you to buy them things? That’s because they do not understand the concept of money. If they have never been introduced to Financial Literacy before, it could be confusing to them when they ask you to buy them something and you respond, “I/We don’t have the money to buy it now!”


Talking to children about money can be a fun and interactive lesson. Depending on the child’s age, parents or teachers can begin by presenting them with coins. This will help them learn to identify and count money.


As soon as children understand the concept and value of money, they should have a piggy bank or a jar to save the money they earn. I respect the fact that not all parents agree that children should be paid an allowance for doing household chores or bringing home good grades. However, I speak for myself since I learned to cultivate the habit of earning an allowance and saving money at a young age, and it surely worked for me.


Now is an opportune time to set an example for children. Allow children to develop the core of financial life lessons by introducing them to:


  • The importance of earning an allowance

  • Saving money for a ‘rainy day”

  • Having emergency savings

  • Being financially prepared for the unexpected


There's nothing better than when a parent becomes their children's financial role model. Allow them to ask money questions while you “penny-pinch” whether it is because you are short on funds for bills, or you are being frugal to avoid a financial crisis.


Be mindful that children love to mimic adults. We want to set the best examples in order for them to grow up to be financially independent and successful, even if it means that they begin by saving one penny at a time. After all, “Every penny counts!


Please stay healthy and safe during these challenging times!



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Milagros S. Johnson

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©2019 by Milagros S. Johnson