When it comes to money and saving, there is no better time than the present to start thinking about it. Do you want to invest in life insurance? What about a vacation savings fund? Do you have an emergency fund? The truth of the matter is that you never know what life may throw your way. When you are financially savvy, you are prepared. If you’re a parent, you know this lesson all too well. But have you been working to proactively portray that information to your children?
Surely you’ve caught yourself saying something along the lines of, “money doesn’t grow on trees, you know!” But have you ever really talked to your kids about the importance of being financially savvy? Depending on their age, there are some appropriate money lessons to share with them.
Teaching Your Kids About Finances
• Understanding the value of money
• Counting coins to improve math skills
• A piggy bank is great at this age to encourage saving
• This is a great time to begin offering an allowance- it can teach the value of money as well as the benefits of saving
• Distinguishing between wants and needs is essential
• Explaining budgeting and saving money
• Discussing the importance of the quality of products and distinguishing price and quantity as well as name brands versus less expensive off-brands
• Investing and the stock market are going to be a new concept in school, so talk about it at home, too
• If your child is thinking about getting a job for the first time, even if it’s just babysitting or mowing lawns, encourage them to open a savings account and teach them about interest rates and saving
• Since this is the time when most kids will have their first “real” job, this is a good time to learn about taxes, too
• Discuss credit and using it wisely – this means credit cards
• Prepare for college by looking at financial aid options, student loans, and long-term debt
• This is the first time your child is truly financially “free”
• Offer advice about student loans and interest
• Talk to your kids about properly saving their money
• This is also a great time to talk to your kids about the value of investing in adequate benefits such as life, health, auto or even renter’s insurance
The earlier you start teaching your kids about finances, the more stable they will be!