After living through one of the worst recessions to hit the U.S. since the Great Depression, many parents may want to make sure their children develop solid financial habits.
And while it may seem that parents will have a better chance of getting their four-year-old to eat their lima beans than listen to an explanation about caring for their credit score, the truth is that kids will be receptive - if parents make it fun. Some might wonder at what age they should start introducing financial information to their children, thinking that it might be too difficult to understand at a young age. But experts say that the younger a parent begins, the better.
"[Age] 4 to 5 is a critical factor in a child's mind in beginning to solidify their long-term beliefs and values in life. That's when they're starting to build in concrete what value systems they're beginning to catch on to. That's where they just begin the cognitive understanding of what money really is," childhood development coach Jordan Wirsz told Fox Business.
Parents may also ease them into a money discussion by playing a game like Monopoly or buying them a banking play set.
Children may also learn smart savings habits and the true value of a dollar by putting an allowance or money earned from household duties into a piggy bank. Parents can give them a specified timeframe to save their money before letting them count it out and earn a reward. These are prime opportunities to teach them about how much items cost and whether or not the reward stacks up to the work they put into earning the money.
Along the same lines, parents can urge their children to divide up their money into different categories such as savings, spending, or even investing, Fox Business said.
But children will also learn a great deal simply by watching how their parents manage their finances. Some parents can teach their kids valuable lessons just by letting their son or daughter sit down with them when they pay their bills or move part of their monthly paycheck into a savings account. By developing a strong financial foundation early, it will be easier for children to understand more complicated financial aspects such as their credit score, loans, investments and equity.
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Lead By Example When Teaching Money Habits To Kids
7/28/2010 4:22:00 PM
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