It's Never Too Early To Teach Your Kids About Money
Stop being scared to talk to your kids about money. Teaching kids about money doesn't have to be a dreadful process. You have the power to make it an actual bonding experience with your child. In this post, I will share some age appropriate ways to teach your kids about money. Remember, it is never too early or late to start the process.
Ages 2 and 3
Teach your child about the differences between a penny, nickel, dime and quarter. Keep it fun and engaging. Do activities like tracing outside the coins. Don't push them to be baby geniuses by trying to get them to add. Also, toddlers may try to swallow coins, so always be right next to them and remember to remove coins when you are done with activity.
Ages 4 and 5
Try playing games like operating an imaginary grocery store.You can introduce the concept of paying for goods and services. Keep it simple and fun. This means don't talk about sales taxes and discounts! Have them pay for goods with pretend money and even introduce the concept of receiving change.
Ages 6 to 8
Make a trip to the bank an fun event. Help your child open a savings account, and encourage him to make regular deposits. As the balance grows, you can discuss the concept of interest and how the bank pays people back for saving their money. Many banks have children's accounts that offer no-fee and no-minimum-balance accounts. Teach them the basics of how to read a bank statement. You can also find online games and cartoons about money to keep your child engaged.
Ages 9 to 12
Okay, now your child is starting to think they know everything about the world. You can start having "real" talk with them. Let them know that most people must learn how to budget. A good teaching method could be introducing comparison shopping. One way to teach comparison shopping is to read a store's price labels with your child, look at the size and price, and compare the bulk amount per cent. Don't forget to take quality into account. For example, one week buy brand-name napkins. The next week, try a generic brand. Then discuss the differences and decide together if the brand name is worth the extra cost.
Ages 13 to 15
A child's early teen years are not too early to learn about the stock market. You can pretend to invest in companies your child is familiar with, like Nike or Google. Read the paper or watch the financial news together, and discuss how the stock values of everyone's choices fluctuate. Don't forget to talk about social responsibility of these corporations.
Ages 16 and up
Super important to teach your kids about the pros and cons of credit cards. Do this before they graduate from high school. Look into kids prepaid credit cards, which look like credit cards, with a set amount of money and then let your teens budget their allowance. Start the conversation about how a credit score can affect their lives.