Financial literacy is a hot topic. Your local banker, Elmo from Sesame Street, and your child’s teacher all want your kids to better understand how money makes the world go round.

Children will learn financial building blocks such as identifying coins, calculating percentages, and weighing financial trade-offs in the classroom. But it’s really up to you to ensure that your future millionaires can balance a checkbook (or the 21st-century equivalent), evaluate credit card terms, and calculate compound interest.

With school in session, here are four ways to educate your kids about saving and spending without the use of a textbook.

1. Lunch lessons. Kids tend to take the cost of food for granted. They know that if they’re hungry, the kitchen is theirs to raid. When the pantry is almost bare, mom and dad hit the store and more food appears.

To introduce your students to the idea of a food budget, give them some real world responsibility. Set a weekly or monthly budget for the hot lunch eaters and give them the funds in a lump sum. If they run out of funds just days into the experiment, don’t bail them out. Make them bring lunch from home instead. Or if you do replenish the lunch fund, make sure they understand that the $5 you gave them is either a loan to be paid back or an amount to be taken out of next month’s food budget.

Brown baggers can learn financial responsibility by giving them an area of the grocery budget. One idea is to set a dollar amount for weekly snacks and have your children make the spending decisions at the grocery store. They’ll quickly learn just how much that bag of chips they hoovered after school costs.

2. Pretend and play. As students get older, encourage your kids’ teachers to take advantage of special programs offered in partnership with schools. Many were designed to teach financial concepts through fun and games.
For example, Junior Achievement of the Upper Midwest introduces economics and business concepts to more than 100,000 students per year through simulations such as its mock city JA BizTown. Minnesota nonprofit BestPrep runs The Stock Market Game for more than 13,000 students annually. Even shifts at the school store can give kids a chance to practice making change and help them to better understand economic concepts such as supply and demand.

3. Homework. When it’s homework time, hit the web. Curious about which financial concepts kids can grasp at what age? Visit MyMoney.gov. Want to teach money matters at home? Use free lesson plans found on the web. Start with “Money Smart for Young Adults” from the FDIC. Then head to the Visa-sponsored education initiative Practical Money Skills for Life.

4. Give back. Part of every healthy financial plan is charitable giving. In this downturn, schools are struggling to stay in the black. The classroom wish list is never-ending. Student-teacher ratios are high. Do what you can to help, whether it’s buying that extra box of crayons when it’s on sale, spending an hour organizing the fall fundraising campaign or volunteering in the classroom.

Kara McGuire is the Minneapolis Star Tribune’s personal finance columnist and mother of three. Read her blog, Startribune.com/kablog, and follow her on twitter at Twitter.com/kablog.

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