It’s never too early to start teaching your kids about finances. The topic of finances may seem like too much of an adult concept for kids to take on.
But even children as young as five years old can begin grasping the idea of money if parents broach the subject.
Financial literacy is key to a successful future. The sooner kids are exposed to financial concepts, the better they will be at managing money in the future.
Equipping them with the necessary skills will make it so they are less likely to overdraw a checking account, amass large amounts of credit card debt, and constantly indulge in impulse buys.
If you want to get a head start on teaching your kids basic money concepts, here’s how you can go about it.
Introduce the ideas of earning, spending, and saving. Unfortunately, money does not grow on trees, so your child will have to earn their keep in some way. Many parents have their kids perform chores in exchange for money.
When imparting your money lessons, it would be helpful to work with all the different kinds of coins and bills. Children at a young age learn better with tangible tools.
Next, teach them how to differentiate between wants and needs. Your child may want to buy the new toy that just hit the stores. And all their friends are buying it, too.
But can they afford it? And how long will it take for them to earn that money back if they spend it? These are just a few of the questions you want your child to consider before they make a purchase.
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