5 Financial Lessons for Kids
According to Forbes.com, children as young as three years old can grasp financial concepts like saving and spending, and a University of Cambridge study found that a person’s lifelong money habits are formed by age seven. So what can parents and Nannies do to help instill positive financial habits in impressionable young minds?
As it turns out, you can do a lot. Keep reading to discover five lessons you can teach today to give kids a brighter financial future tomorrow.
Lesson 1: It takes time to get something you want. Most of the time, when children want something, they want instant gratification. But teaching children that they may have to wait to receive a wanted item will help them learn how to save. The next time your child wants a toy or a new pair of shoes, don’t simply buy it for them, but help them figure out how long it will take them to save enough money to buy it on their own.
Lesson 2: Making wise choices with the money you have. A great way to get kids involved in the decision making process is to get them involved in the grocery shopping. Give them a budget of $2 to $5 and let them choose something simple like fruit and vegetables or snacks. After they’ve chosen, ask them why they selected each item and discuss whether each item was a good choice.
Lesson 3: Shopping has a purpose. Maybe shopping is your hobby, but to help a child become financially savvy, don’t treat shopping as a leisure activity around them. By making lists of what you need in advance, and only shopping when you need certain items, it shows kids that money shouldn’t be spent frivolously.
Lesson 4: Banks are places that help people with their money. Take your kids to the bank with you and encourage them to ask you questions about what you do there. Explain the concept of how banks keep people’s money safe and organized, and help them open a savings account of their own.
Lesson 5: Credit cards and debit cards are not magic. It’s important to let kids know that when you’re buying things with plastic, the amount you spend will have to eventually be paid back, or deducted from your checking account.
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