This article was written by a guest contributor. For guest contribution guidelines, please visit this page.
Lyle Solomon has extensive legal experience, in-depth knowledge, and experience in consumer finance and writing. He has been a member of the California State Bar since 2003. He graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, in 1998 and currently works for the Oak View Law Group in California as a Principal Attorney.
Do you want your children to do well financially when they grow up? Financial lessons and education at an early age is the key.
But at what age should you begin bringing up money with your kids? Experts advise teaching your kids the value of money as soon as they are interested in it. You should plant those seeds as quickly as possible because youngsters typically acquire their first financial habits between the ages of 7 and 9.
Anyone, regardless of age, can understand money concepts when you properly teach financial lessons. The important thing is to meet your children where they are.
Why Should You Discuss Money With Your Children?
Continuous, open conversations about money from childhood into adulthood can help your children develop a healthy relationship with spending and saving for the rest of their lives.
According to a recent study, good financial education connects with good financial behavior, such as being less likely to overdraw a checking account, spending less than you earn, and saving more. According to the study, 49% of those who received more than 10 hours of financial education spend less than they deserve.
Another survey found that 83% of parents wished they had learned more about finances as children because it would have significantly aided them in making financial decisions. Money has historically been a taboo subject, and many people do not have the opportunity to learn about it at a young age.
Furthermore, 59% of those parents, like their parents, do not feel comfortable discussing money with their children.
When children don’t learn about finances, it affects how they manage their day-to-day finances and how they plan and meet their financial goals as they grow up.
Because financial education is not explained correctly in schools, you can take the initiative to teach the fundamentals to your children.
By laying the groundwork for a healthy, comfortable, and open conversation with your children, you can help them feel more at ease with their finances, allowing them to make better financial decisions.
How to Have a Money Talk with Your Children
The word “talk” makes the subject more uncomfortable and frightening for children. ‘Money Talk,’ in my opinion, is even scarier.
To instill financial lessons in your child, you do not need to sit down and have a profound conversation. Introduce this subject to your children light-heartedly so that you do not scare them away and make learning much more accessible.
Educating Your Children on Important Financial Lessons
Show Them the Importance of Saving
Money is normal to burn a hole in your children’s pockets. However, they must understand the pleasure and benefits of delayed gratification.
If they have their eye on a video game, suggest that they stop spending their allowance on chocolates or other instant gratification and save for a few days or weeks to make the more significant purchase.
This will help them understand the importance of saving money and help them save money in the future to meet their financial goals.
Help Your Children Learn to Compare Prices
Another thing you can teach your children is how to make the most of their money through comparison shopping.
Make a shopping list and check the sales circular to see where certain items are cheaper. Make sure your children are watching what you’re doing.
Bring them grocery shopping with you and demonstrate how you compare brands to make your money buy more.
If your children want to buy something with their allowance, show them how to compare prices using online sales circulars and store websites. This habit will follow them throughout their lives, and they will always make the most of their money when purchasing something.
Teach Them The Importance Of Money
When one works for money, one understands its worth, and children are no exception.
Making them work on essential tasks in exchange for money is the best way to teach them the value of money. Feeding pets and making their beds can be examples of functions.
Allow them to earn more money by doing bigger chores like occasionally cleaning their room.
When your children work for money, they are less likely to waste it on unnecessary purchases, which will benefit them in the long run.
Increase Cost and Conservation Awareness
After you’ve taught your children the value of money, teach them the hidden costs of things. Increase their awareness of things like water, electricity, and home heating.
When they learn how much these items cost, show them how they can save money by turning off the TV while not watching it or turning off the water while brushing their teeth.
If taught early, these good habits will stick with them throughout their lives and save them a lot of money in the long run.
Begin with Physical Currency
Physical currency is a great, tangible way to teach your children about money.
You can make them keep their paper money in designated envelopes or put their coins in a piggy bank since handling money demonstrates the fundamentals of money management.
Teach them about savings accounts and why they are essential as they grow older. Make sure your kids start saving money for the future when they are between the ages of 9 and 13 by having them put some of their allowances into savings accounts.
Teach Children the Value of Giving
Helping those in need is as important as earning, saving, and spending. When teaching your children about money, make sure to include the value of charitable giving.
Know what your children are passionate about and show them how they can help. For example, if they adore animals, assist them in raising funds for an animal shelter.
If they do not have enough money to donate, explain how they can help by donating their time.
Make Learning Entertaining
Gamification is a fun and legitimate way to teach important lessons to children, and financial education is no different.
Use games to help your children understand how money works. There are numerous e-games available to help teach children basic financial lessons and even more complex concepts of money.
Be a Good Example
Your children notice everything you do. So, modeling consistent behavior is essential to be a good teacher.
For example, if you overspend, don’t go shopping just a day or later.
Nobody is perfect, of course. You may have made some financial mistakes, and be truthful about it.
For example, have you ever purchased something you thought you needed, but it took you months to pay it off? Explain to your child the consequences of your actions and how they made you feel.
Show them how you pay off your high-interest debt at a low-interest rate by choosing smart debt relief options like payday debt consolidation. Your children may be too young to understand payday debt consolidation, but they will be curious and question you someday.
You don’t have to be a financial expert to teach your child about money. And if you start early, it will be easier to keep the lines of communication open.
As your child grows and expands their financial education they will be laying the groundwork.
Final Word: Financial Lessons Now Can Lead To Financial Success Later
Teaching your children financial lessons will take time at any age, and it will not always be easy. However, if you want your children to be able to manage their money successfully when they are older, investing the time now will be worthwhile.
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