Are we all financially literate? Do we deprive our children of financial education? Do we teach them how to manage the money they receive from their elders? Do we teach them how to spend money when they first plan to go out to dinner with their friends? As parents, do we encourage them to save or invest money? Also, when they want to waste their food, do we tell them that it was bought with hard-earned money and we should not waste it? These small habits inculcate useful values right from childhood. Next, we will look at the age at which children should be taught about financial matters.
3 to 5 years old
When your child is three to five years old, accept the fact that now is the time to introduce your child to money matters. While this is an age where children are adorable, this is also the age when they understand the concept of “shopping” and “money.” At this age, they should start developing money habits. It’s time to get to know that they need money to buy things and they have to work to earn money. If you add a fun element to this activity, it becomes easy and simple. Agree with them that if they want to get a gift like a big burger, a nice doll, or a Disney princess dress, they have to show good manners and earn points by behaving better. It can be 100 points for burgers and 500 points for princess dresses. Also, seeking their help in counting money at this age can be used to help children get acquainted with finance.
6 to 12 years old
This is the age at which children are already attending primary or secondary school. They need an allowance. During this time, their demands grow. Things around them and their friends also influence their choices. At this stage, there is a lot of pressure on parents to cope with this burden. The school environment and the need to be socially competitive have an effect on children. At this age, they often want branded clothes and expensive stationery items. So make sure you help them understand the importance of money and finances in their growing years so that they have the ability to make wise decisions.
Book: If You Made a Million (Reading Age: 4 to 8)
This is the best time to open a minor’s bank account in your child’s name. Their own bank account will motivate them to save money. Also, encourage them to live a simple life. Remember, these incentives will help them better manage and save money for their needs as adults.
13 to 18 years old
Teens! This is the age where parents are either friends or enemies of their children. They are new to the world of fashion and gadgets, which are now their best friends. With such hobbies will come significantly higher costs. This is the time to include them when your family talks about finances to make them financially wise. At this age, your child is already preparing for higher education. Discuss financial matters with them. Explain the importance and methods of college fees, student loans, banking, and credit cards, etc. This will make them aware and they will be financially vigilant. At this age, motivate them to work and to understand that there are no free gifts to life and they have to work to earn money.
19 to 23 years old
At this age, create awareness among them about reading and understanding business ideas and business management. No matter what field your children go to, make sure they are aware of the basics of business and economics.
Education and training for children in money management or finance do not end here. When they get their first paycheck of their own hard-earned money, a piece of good investment advice from you will help them make even better money in the long run. Remember the old adage, “Give a man a fish, and he will eat for a day; teach a man to catch fish, and he will eat for life.”And the man in charge of you here is your own child. An early and small start always helps, whether it is investing or providing education and training in financial matters. Your small efforts will be very helpful in creating self-reliance and wealth in the life of your children.
Tip: Request your bank to add your child to the authorized user list of your credit card. It will result in credit scores for your child that will be helpful for them by the time they turn 18.
Book: The Everything Kids’ Money Book: Earn it, save it, and watch it grow! (Reading Age: 7 to 12)
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