Financial skills are crucial for kids to learn starting from a young age. However, it can be hard to talk about money with anyone, let alone in age appropriate ways. Here are four ideas to help your kids have an understanding of money and learn good habits.
1. It’s never too early for a savings account. Kids of any age can have a savings account and you should start one for each child as soon as they are born (with your name on it as well of course). Then, after holidays or other times your child may be given money you can make trips together to the bank to deposit the money. Whether you make them save most of it or leave it up to them, periodic trips to deposit money will teach them that saving is important. The money that they save can be used later for college, a car, or another big expense.
2. Save up for something. While you may want to have a savings account to save for the long term, kids can also learn important lessons saving up for something in the shorter term. For example, if there is a toy that requires saving up allowance for a few weeks, you can encourage them to do it so they can see the benefit of saving money while still having the gratification of getting something they wanted.
3. Allow them to earn money. Some parents may give an allowance, and others may have kids earn money through chores. Either way, practice makes perfect and kids learn the most about money when they are able to handle it themselves.
4. Talk to them about expenses. In order to understand how much it really costs to get by these days, kids need to know the different kinds of expenses that exist and how much they cost. You can go into as much detail as you think is appropriate, but kids grow up before you know it and arming them with financial know how will pay off their whole lives.