Three Legs of the Financial Education Stool
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Will you run out of ideas to talk money with kids? Consider three legs of financial education. There are great Money Moments in each.

Knowledge - When most of us think "education," we think about knowledge. This is the information - the concepts - that consumers need to understand. For example, everyone should learn how to define a want vs. need and to recognize the denominations of money - nickel, dime, quarter, dollar… Most teachers and school curriculum focus on learning basic financial concepts.

Skills - Next, we develop a skill based on the knowledge we’ve acquired. Financial skills include how to count change for a purchase, how to compare two loan offers when buying a car or how to create a net worth statement. Skills also include things like how to use an ATM or how to use on-line banking. Skills are learned by practice, and then become a habit. Not everyone will perfect the same skills.

Behaviors - The hardest area to master is behavior (which includes money values, attitudes, habits), so we often neglect to address some of these. Paying yourself first is a savings behavior. Another example is how we plan to use credit cards (or not).

What is most important as you build your financial education strategy is to
include all three legs of financial education . Train yourself to watch for opportunities. Perhaps you will want to start lists for knowledge, skills and behaviors and what you want to accomplish/teach.

Conceptually, this is not rocket science. You are simply asking:
  1. Is there knowledge my child needs now?
  2. What skills can we practice to create a habit?
  3. Are there behaviors or values to instill?
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Examples of Knowledge, Skills & Behaviors
  • Recognize coin denominations
  • Understand wants and needs
  • Basic math skills
  • Recognize peer pressure
  • Save regularly
  • Use credit wisely
  • Confidence to say "no"
  • Make change for $10
  • Evaluate wants & needs
  • Figure interest or borrowing costs