It’s Never too Early to Start Teaching Your Child About Money
As soon as your child can count, start teaching them the recognition of coins and bills. You will also want to start explaining how different things have different values. You can do this at the grocery store or toy store. Many younger children are visual learners, so having hands-on experience with money can help them understand it better.
Understanding the Concept of Needs vs. Wants
Once your child reaches elementary school, this is an excellent time to discuss needs vs. wants, explain earning money from a job, use allowance or birthday money to spend, save, and donate. You can use piggy banks, mason jars, or even cupcake wrappers to let them divide their money. This is also a great time to take them to the bank with you to see the process and even open a savings account.
Budgeting, Paying bills, and Informational Security
As they get older, you can discuss creating a budget and more in-depth payment options like checks, debit cards, payment apps, online purchases, credit cards, and even fraud. Reinforce the ‘dangers’ or consequences of some choices, teach them to have a budget, even plan a budget for a mock day. Explain the importance of informational security, aspects like two-factor authentication on accounts, never sharing passwords, and never letting a friend know their pin.
Money Management for the Teenage Years
Once they are in high school, you should start discussing loans, their future needs and responsibilities, and how what they do early on will affect their credit and other things like getting a job, buying a house, getting insurance, and so much more. Reinforce the need for them to plan and have a budget for when they are on their own, including everyday needs, emergency savings funds, and future 401k options.
By having these conversations often, you will build confidence in your kids when it comes to money and teach them skills that will benefit them throughout their entire life.