As parents, we know that financial literacy for kids is critical. But how do we get started?
Show your kids how you save, spend, invest, track, budget and so on. Talk openly and often about your finances using the ideas in this post as starting points.
A fun way to do that would be to pick out a piggy bank together, then deposit money they earn, find or receive.
Basic Concepts (4–8 years old) – Point out public companies they’re familiar with (e.g., Disney, Mattel, Apple). – Explain how regular people can buy a tiny piece of those companies.
You can get them started with an investment account much earlier, perhaps as soon as they have some extra birthday or holiday money.
One of the best ways to do that is to take them shopping with you. You can then weave in financial literacy lessons by showing them how you spend less on the things you need to buy.
Through delayed gratification, kids learn to: – Develop a long-term mindset. – Make money decisions thoughtfully. – Avoid impulse spending.
You can do this by: 1. Observing what they’re taking in. 2. Steering the narrative in a healthier direction.
Explain to your child how tax deductions and sheltering work and the differences between tax-deferred and tax-free accounts. Keep in mind, however, that these concepts are somewhat complex, so take it slow.
You can help your kids avoid getting into a situation like this by: – Explaining that credit cards and loans are not free money. They will have to pay it back one day—with interest.
Here are some kid-oriented whys to give your kids some ideas: – My why for putting money in my piggy bank is to buy myself some candy the next time we go to the store.