Psst! Did you know that money habits can be set by age 7?!?
Yup, researchers have discovered that the way we tackle money matters as adults can be set in stone by the ripe old age of 7!
That's right; things like planning ahead, budgeting, delayed gratification, and returning borrowed goods are all part of our childhood habits that roll right into our grown-up world. So it’s never too early to start teaching our little ones.
Here are some helpful suggestions to steer you in the right direction, but ultimately, you know your child best and can choose what is most fitting for their age and needs.
2-5 years old
Teaching tiny ones about money? Cash is king for this age group! Next time you're out shopping or grabbing a bite, have them hand over the money. It shows them that things come at a cost and there's an exchange involved. Credit cards? Too abstract for little minds to grasp.
Once they're out of the 'everything-goes-in-my-mouth' phase, introduce money jars! Decorate them together and label them save, spend, and give. Encourage them to pop a percentage of their pocket or chore money into each jar every time they get 'paid'.
And remember, your little sponge is soaking up more than you think. Be mindful of the energy you're giving off when talking about money at home. Even if they don't understand everything, they can sense the vibes!
6-10 years old
Give your kiddos a dose of financial smarts by having them pay for their store purchases with their “spend or save” money jar.
If they're running short on dough, it's a fantastic lesson to teach them that patience is a virtue and things require saving up for. You can even show them how to earn more moolah by adding age-appropriate chores to their list.
Let them learn the art of delayed gratification by sleeping on a potential purchase overnight. If they still want it come morning, then you can come back to make the purchase.
To help them better understand the concept of paying for things, stick to cash. Even adults can struggle with the abstract nature of card payments (our brains have a hard time registering card as paying and credit cards can even activate your brain to crave more spending!!!)
Encourage a lifelong habit of investing by adding an “investment” jar. The amount they save isn't important; it’s the habit of putting something aside that counts.
11-14 years old
Teach them the value of earning money by tying allowances to chores
Encourage them to spend their own money on things they want, rather than relying on you
Expand their money-making horizons by brainstorming age-appropriate jobs like dog-walking or lawn-mowing for the neighborhood
Get them involved in household budgeting to give them a taste of how money management works
Let them flex their budgeting muscles by having them put together a family vacation budget that includes travel, accomodation, food, and activities. They'll be budgeting pros in no time!
15-18 years
Before handing your child the keys to their own set of wheels, make sure they're in the driver's seat of understanding all the expenses that come with car ownership. It's not just the cost of the car itself; think insurance, registration, gas, oil changes, roadside assistance, and the occasional surprise repair. Sit down with your teen and create a comprehensive list of all the costs involved in car ownership.
But wait! Don't stop there. This could be an excellent chance to introduce your child to the concept of working part-time and planning for University. Get them more involved in your household budget and investments.
Challenge them to manage the grocery budget and meal plan for the week and even explore investment calculators to show them how compound interest works. They'll soon learn the importance of starting early and the value of a dollar.
