By the age of 3, kids are already growing life-long financial habits
If you have younger kids, it’s never too early to start teaching them about money. According to pbs.com, by the time your child turns 3, he or she can already grasp basic financial concepts and by the age of seven, your child most starts to set their financial habits. Start taking advantage of the opportunities you have with your children to teach them the value of a dollar. If your kiddos are over the age of seven, then don’t continue teaching them how to manage, save, spend wisely and build credit.
Lead by example
Kids are like sponges and will absorb everything you do or say (many of us have regretted this from time to time). This holds true even in your financial health. Simple things like taking your child to the grocery store and basing your groceries off of a strict and budgeted list is a great way to show proper budgeting techniques and the value of planning ahead. Better yet, involving them by having them read each item off your list, find it and match the price to the budget one at a time helps makes it interactive and gets them involved in the shopping process.
Don’t impulse buy
This can relate to your everyday shopping experiences, errand runs, stopping at the gas station, or anything that involves potential spending. For example, if you’re stopping at the gas station to get gas and your child asks you to buy a snack for them while you’re at the pump (knowing you are on the way home) gives you the opportunity to explain why it saves to wait a few extra minutes.
Show them how to save
Whether you give them an allowance for doing chores around the house or give them your extra pocket change at the end of the day, teaching your child to put that money in the piggy bank will help them get in the habit of saving for the future.
Teaching the value of a dollar
Now that they have a little tangible money set aside, they can start to realize that the things they want cost more than they may have thought. Help them pick out their next purchase whether it’s a new toy, game, or candy, and use it as a goal that they can work towards with their new-found savings. You can even make this into a fun project by creating a poster of the items they want and how much they will need to be able to afford it. Add in the chores they will need to do to earn this money and wallah! You have a new fun way to get them excited to save.
Let them spend and let them fail
Like many adults, children can be easily distracted by the latest and greatest things they see in a store. If they already have a goal in mind and are working towards it (a really big toy, for example), don’t be afraid to let them spend their funds on a distracting and shiny alternative. Showing them that a dollar is quicker spent than earned is one way to teach them the reality that money doesn’t grow on trees. If they want it and are willing to burn through their hard-earned savings to have it, then don’t be afraid to let them buy it. They will quickly realize that the money they saved up for the bigger toy is now gone and will have to work harder to make up those spent funds.
All in all, it’s never too early to start teaching your child the values of money. Incorporate your own fun ideas and make it interesting in an interactive and creative way.
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