Teaching children about money is primarily up to parents because few school systems teach personal finance. Parents have so many things to teach children and sound money management skills should be among them. How to handle money wisely is one of the most important things children need to know, both while they are growing up, and when getting ready to be young adults. Too often, explicit teaching of financial values is overlooked, but they learn a lot by observation and how they are treated financially.
Thankfully, there are plenty of resources available for parents, kids, and teachers:
First financial lessons for children
Children are ready to learn different things at different ages. Even at young ages, they can learn that it takes money that you get from working to buy things, there is never enough money to buy all we want, and we can’t get everything we desire. For youngsters, using real coins and play money is a great way to practice counting, adding, and subtracting.
As they get older, they need real money to learn real skills. Children need to learn similar financial values as those we are discussing for adults of any age: the difference between wants and needs, handling bills and savings, and how to save, spend, and manage their financial resources for short-term gratification and long-term goals. They need to learn how to live within their limited means, save towards a goal, and shop for bargains.
Parents Magazine has a nice age guideline for teaching children about money.
Next time, we will discuss the hot topic of allowances.