Educating your kids about money and how to use it is a relatively crucial part of their upbringing. But, the question is, when to start educating the kids about money?
Indeed, at an early age, your kids may get acquainted with what money is. But, it would ideally take them years before they can learn how to manage it.
Honestly, there is no right time to teach your kids about money management. Perhaps, it is a lifelong lesson that they’d keep on learning as they go.
However, at every stage in their life, there’s something that you can do to help them get the gist of it.
And that’s precisely what we will be discussing in this article.
During their early years, children usually don’t understand what different currency bills or coins mean. For instance, if you’d ask a 2 or 3-year-old to choose between a penny, nickel, and dime, they will most likely select the nickel. The reason being, it’s bigger in size.
You know it, that nickel is less than a dime and more than a penny. But they don’t!
So, the first thing you should be teaching them is about numbers.
You can start this by playing simple games with your children.
For example, you may play “guess and get” with them. Let them guess which coin is what, and if they guess it correctly, you can give it to them as consolation.
Note: Small children, especially younger than 3 years of age, may try to swallow the coins. So, you should always be vigilant and stay close in supervision.
By the time your child reaches their teens, they’d be pretty much familiar with what money is and how to use it.
Now is the time you should teach them how to compare and spend smartly.
For instance, you can get your child a debit card for teens from Greenlightcard.com to help them keep track of their money.
Subsequently, they will also understand the value of money and how each purchase would affect their finances.
For this, you can fix their monthly allowance. Or better, you can set commissions for the tasks they do every day.
For example, you can offer them $10 for cleaning up their room, $12 for helping mom with laundry, and likewise, any other amount for other tasks they do.
In this manner, you can give them a taste of what real-world earning money feels like. And as a result, they’d be better equipped with the knowledge to save and smart-spend their cash.
By the time your children are old enough to step out into the practical world, they should be smart enough to understand the basics of earning and saving money.
But, your role does not end here. Indeed, now is the time you should be teaching your kid about investments.
Note that teaching your children about investments would help them understand the value of wealth. And, of course, how to grow it too.
Besides, investments would also help improve their credit score, which they would come to enjoy a little later in their lives. (During college or when they buy their first home or car.)