Most people will agree that raising children is one of the most important things that a parent will do with their life. It is such an important ‘task’ because parents generally have the biggest influence over their child’s values and priorities, which can profoundly effect how stable they are as an adult. Teaching children to be financially stable is one way a parent can help their child ease into adulthood without major money problems and be able to use money as a tool to assist them in many areas of their lives.
Starting as early as age 8, parents can be sharing a variety of financial insights to get a young mind to achieve the right thinking in dealing with money. You can start mentioning money concepts as early as kids can count, but at around 8 years old a child can best comprehend such concepts as long-term and short-term savings, dividing income, and the pros and cons of credit. As a child gets older, these financial aspects can become more involved and more advanced concepts can be taught such as mortgages & loans, investing and sources of income.
Children will reap life-long benefits from their investment of time into their financial education, before they have a chance to develop bad money habits. There are many ways to appeal to the interests of each child to best teach about various money ideals and pique their interests too:
- teach about saving with a goal of buying something that they want
- educate on the ins and outs of investing by following the stock of a company that produces something that the child enjoys
- provide a budget outline for family expenses where children and parents come up with the forecasted numbers together and then keep track of actual costs.
Keep the financial education light and fun to start with so there isn’t any resentment from the child in later years to keep on learning.
The benefits of instilling good financial knowledge will create a solid foundation for a financially stable future. Not only will your well-trained child be more likely to have an adequate savings account and live within their budget, they will also be able to see credit as an area of caution. Many adults fall into the ‘credit trap’ before they even realize what hit them. Gaining financial wisdom, before any real responsibility of money is in your child’s life, will almost guarantee the avoidance of unnecessary debt. It will be the best gift your child never knew you gave them!
Awesome ideas! Thank you for sharing!
You’re welcome, Dana. Thanks for reading!