Unfortunately, personal finance is rarely taught in schools, so unless kids learn about money at home, they often learn hard lessons as adults. That’s why it is so important for parents to put this task on the list of things to teach their children, starting at a very young age.
As you deal with finances on a daily basis, involve your children, keeping in mind the child’s age. For example, grocery shopping can become a lesson about budgets and decision-making. Simply allow a younger child to choose only one item. Older children can learn about budgeting and sales tax while shopping for school clothes. A wellness check at the doctor’s office presents the perfect opportunity to explain a bit about health insurance.
TEACH BY EXAMPLE
Let your kids see you working on planning finances. Tell them how you are saving up to buy something special for the family or putting money away for college and retirement. An older child could also learn the concept of time and money. At tax time, explain to them why you are paying income or property taxes.
LEARN BY DOING
Chores are a great way to teach kids to earn money. You can further help them learn about saving by putting their earnings into two clear jars. For every dollar earned put a quarter into one jar for savings and 75 cents into another, for spending. Encourage them to watch their money accumulate and add any birthday money they may receive. You could open a savings account for older children.
Teaching your children about money at any stage is going to take time on your part. It won’t always be easy. But if you want your children to know how to successfully manage their money when they get older, taking the time now will be worth it.