Did you know that lifelong money habits can be well set by the time a child is 7 years old?
In fact, research shows that money management skills and shortcomings are molded and forged while in childhood. Children learn by example and by the way we present financial education to them throughout their early years.
We all want our kids to grow into financially healthy adults. But how do we get them to learn these crucial skills they’ll need for life? To meet this challenge, parents need to make financial education child-friendly and present it in a way a young mind can grasp and remember.
In this educational series, we will share all you need to know about teaching kids to handle money, from the cradle to college and beyond.
Introducing the Concept of Money
It’s never too early to learn about money. As soon as children can understand basic words and concepts, you can introduce them to money and its purchasing power.
Toddlers learn best through experience; every errand you take with your toddler can turn into a teachable experience.
- Use a grocery run to point out price tags on food items and to teach your child that these numbers tell you how much money the items cost.
- A visit to the credit union provides an excellent opportunity to introduce your child to the concept of banking.
- When you use your credit or debit card in a store, tell your child that this is another way to spend money.
- When you and/or your partner head off to work, you can explain to your child that you need to work to earn the money you need for living.
As your child matures and their grasp is stronger, you can begin allowing your child to take an active part in your shopping excursions. Ask your child to find you the brand with the cheapest price. Let them pay for your purchases on their own, and with your supervision. Each positive interaction with money is sowing the seeds for a lifetime of financial responsibility.
Stay tuned for the next part of the Financial Literacy for Kids series!