How To Introduce Money Into Children's Lives
It’s important for parents to teach financial values and good money habits to their kids. They should not rely on schools to teach these lessons; it really needs to come first from the parents. Also, it’s never too early to start talking about money with your children. Below are the important milestones you should achieve when it comes to raising money-smart kids.
Children under 3
Lay the basic foundation by teaching them how to count using actual coins and bills. This will reinforce in them the nominal value of money. Introduce to your kids the concept of money by showing and explaining to them the process of buying.
4 to 7 year olds
It’s now time for their very first financial lesson—the concept of saving and budget allocation. This can be achieved by giving them three piggy banks: for saving, spending; and charity or giving. Guide your child on how to divide his money into the three piggy banks every time he receives an allowance.
8 to 10 year olds
Help them understand budget planning by including them in the process of creating the household's grocery list. Introduce to them the concept of “needs” and “wants.” When shopping, show them how to compare prices to get the best deal in products. Teach them how to use a calculator and let them add the total of your groceries as you shop.
11 to 13 year olds
Empower them to create spending priorities by giving them allowance thatís just enough for their necessities, then let them “earn” extra allowance through special chores or tasks. You can also introduce them to the concept of investing and passive income. Open their very first savings account and teach how their savings account earns interests in the bank.
14 to 18 year olds
Encourage them to find ways to make extra money. For example, suggest ways on how they can earn by doing simple jobs around the neighborhood, or by helping them find things that they can sell. This will nurture their entrepreneurial spirit and empower them to think beyond employment as a source of income.