As a parent, you can help your child learn about money by giving them practical experiences that start at a young age and extend into young adulthood. Financial experts say it’s important to talk to your kids about money regularly.
Important Concepts to Discuss
Helping your kids learn money-management skills will give them a great financial foundation. Here are six basics concepts to start with:
- Understanding needs versus wants. Help your child learn the difference between things they need – like food, and wants – like the latest video game.
- Knowing how much things cost. Take your kids shopping for groceries or other items to teach them about prices.
- Setting financial goals. Discuss short- and long-term goals, like saving money to buy a new pair of shoes, and saving for college or buying a car.
- Making a budget. Show kids how to track their spending and prioritize saving.
- Managing credit and debt. Explain the importance of using credit and debt responsibly.
- Sharing with others. Talk about the benefits of charitable giving. Volunteer as a family at school, community, or religious events.
4 - 6
Start with a piggy bank
Presenting your child with a bank is a great way to teach counting with coins and bills. Giving your child an allowance helps them learn about saving and spending.
7 - 12
Open a savings account
A savings account opens the door to teaching your child about dividends and the value of compounding returns. Encourage your child to set aside allowance, birthday, or holiday money so they can pay for their own agreed-upon items.
Earn and save wisely
Give your child greater independence and more responsibility to make decisions about their savings and spending. If they have a part-time job, this is an opportunity to teach them about payroll deductions and why we pay taxes.
Ages 18 and older
As a young adult, your child should be responsible for paying for certain expenses, such as their cellphone bill. Help them open a checking account and learn how to monitor their transactions using online banking. Discuss the importance of building good credit by paying bills on time.