When to Train Youngsters About Cash

Okay, so you can’t talk about stocks with your 3 year old, but don’t underestimate your child’s financial savvy.

Corresponding Research from Cambridge University, Children can start learning financial concepts at 3 years old and develop financial habits at 7 years old. This may seem incredibly young, but kids are like sponges and they pick things up quickly!

So if you’re considering when to talk to your kids about money, now is probably the right time.

When to start talking to your kids about money

It is almost never too early to talk and convey money with your children good financial habits. However, this doesn’t mean that you should share all of your financial worries and stressors with your second grader. It is important to present money concepts in a playful and age-appropriate way.

Whether it is reading children’s books about money, playing fun games that involve a financial element, or just having Conversations about money, there are many approaches you can take. It is important to remember that children primarily learn financial skills from their families. So try to normalize money conversations at home and be open and honest about your finances while staying age-appropriate.

If you are unsure of how to teach your kids money, don’t worry. It’s not up to you to have all the answers. You can still improve and support it financial education by acting as their financial guide. If you don’t know the answer to any of your children’s questions, refer them to a useful book or other financial resource.

How to Teach Money to Children of Different Ages

The benefits of talking about money with your children and introducing financial topics early on cannot be overstated. Here are some of my favorite ways to teach kids about moneyno matter how old you are.

Toddlers

For parents of young children, consider introducing a piggy bank. You can teach your young child to recognize the different types of coins while using their fine motor skills to put the nickels, dimes, and quarters into the coin slot. You can also practice counting while putting each coin in their piggy bank.

Preschoolers

Make money by playing shop with your kids. Make them work as shopkeepers and buy various items from their store. This will teach your preschooler how to exchange goods and money. Tell them you want to buy one of their toys and ask how much it costs. You can use play money to demonstrate exchanging the toy for cash. This also gives them an opportunity to learn about financial concepts such as buying, selling, value, cost, and price.

Kindergarten children

You can continue to play with your kindergarten child. This time play a game of Bank. Have your child pretend to be a bank clerk. You can come to the bank with your debit card and deposit or withdraw funds. Then switch roles – you play bank clerk and let your child come to the bank for a new financial experience. This offers the opportunity to discuss the concept of saving, banking and direct debiting.

primary school

Take your elementary school age kid to the store for a fun financial experience. Talk to them about what you are going to buy and how much it will cost. Show them your shopping list and stick to it. Tell them why they can’t have every candy bar or toy they see. This experience can reinforce the concept that things cost money. It can also give you the opportunity to discuss needs and wants – you don’t need a candy bar, you just want one. Delayed gratification is another great lesson to learn. Tell them they can have the toys they want but that they need to save theirs pocket money to buy it.

When you’re ready to check out, encourage your child to watch the cashier ring your items. Then let them help you pay. They can help you count your cash or you can use your credit card. This gives you a great opportunity to introduce the concept of credit. When you’re done, show them the receipt so they can see how much it all costs. Overall, a trip to the grocery store can be a great thing Finance lessons for children.

Middle school

Make money off a family game night. Pull out Monopoly or the Game of Life and enjoy quality time together while also sharing important money lessons. Board games can be a great way for your middle school aged child to discuss the concepts of rent, bills, budgeting, and even bankruptcy.

Secondary school

When it comes to teaching older kids about money, don’t hold back. You don’t want to scare your high school student, but you definitely want to prepare them for the real world. Make it your business to financially sink them before graduating from high school. Before leaving your home, you want them to understand how to use a credit card responsibly and the importance of having good credit.

Talk to your teen about student loans and even show them the amazing student debt statistics. Introduce them to the concept of investing and the magic of compound interest. Again, if you don’t fully understand some of these concepts yourself, use this as an opportunity to learn together. Find a new finance podcast and listen to it with your teen in the car or share your favorite finance blogging sites with each other.

What to Avoid When Teaching Children to Money

Now that we’ve described some of the productive ways you can teach your kids of all ages the money, what should you avoid? While it’s a good idea to be open, honest, and age-appropriate, it’s probably best to avoid:

  • Avoid heated money discussions – Try not to argue or argue about money in front of your children. It’s okay to have money conversations and even talk about your financial failures as this is a great way to help them learn. But arguing about money is a no-go because it can create a negative association between arguments and money.
  • Don’t model financially irresponsible behavior – Small children learn by modeling. Monkeys see, monkeys do. So, if mom and dad keep buying things they can’t afford and their credit cards skyrocketing, don’t be surprised if their little one grows up making some of the same financial mistakes. Do your best to model responsible financial behavior and if you make a mistake, talk about it.
  • Don’t make the subject of money off-limits – Many people find it uncomfortable to talk about money. This may be because their parents didn’t talk about money or said it was rude to talk about money. But it’s time to break the cycle. If you want to raise money-loving children, you need to create an environment where they are comfortable, asking questions, and having financial conversations.
  • Don’t give them everything – If your child sees you as a 24/7 bank full of money, they will not learn to equate money with effort or work. Teach your children that money doesn’t grow on trees. Make them work for it. Set up age-appropriate chores and make them earn a dollar’s worth.

There is no time like now to teach your kids about money

Nobody expects you to have all the answers on money topics, so don’t let that put you off. Just do it! The most important thing to do when raising financially savvy children is to start early and speak often.

– From Jessica Martel

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