Want your kids to do better than you financially? Want them to keep a budget and invest in their future? Financial education is key.
A 2018 National Financial Capability Study found financial education correlated with good financial behavior like saving more, spending less than you earn, and being less likely to overdraw a checking account. It reported, “49% of respondents who received more than 10 hours of financial education report spending less than they earn, compared to 36% among those who received less than 10 hours.”
While it’s never too late to learn, the earlier you learn financial literacy, the greater the long-term impact. That’s why we've compiled money methods to teach your kids about finances at every age.
Kids start learning the moment they are born. Initially, this learning is imitation based, like following a parent’s lead to smile, track objects, and say their first words. Whether you know it or not, they are learning and picking up your habits. Start early by setting a good example for them to follow later. The habits they’ll pick up include developing a budget at the grocery store, paying bills on time, and resisting impulse buys. When you discuss your decision-making with your toddler, they’ll learn how to make better decisions on what to (or not to) buy.
Preschoolers and Kindergartners
While kids at this age may not understand the value of money, they should understand the need to pay for merchandise. Kids learn from shared experiences, so include them in the grocery trip to help them understand this process. To make it more tangible, leave the credit cards at home and use cold hard cash.
By 7 years old, we develop basic financial behaviors, according to a University of Cambridge report. Before you panic and think your kids are already behind, they’ve probably addressed the basics: counting and exchange.
First to Fifth Grade
With a basic understanding of the purchasing power of money, your grade-schooler probably now wants more. It’s time to explain how to earn money, save it, and what opportunity costs are.
Next week we will look at ideas to teach sixth to twelfth grade about money.
(Partially reprinted from www.moneygeek.com)
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