From feeding that first piggy bank to helping devise a budget for college spending, helping kids learn healthy money habits can take a lot of work — and patience. But one thing’s for certain: Teaching your kids about money is important, and the earlier you get started, the better. Read on for five good reasons why today’s head start could lead to tomorrow’ssuccess.
#1: Strong behaviors build a strong foundation
The iconic behavioral psychologist Erik Erikson said that our foundations of growth and development are built within the first two years of life. All other stages are built upon either a solid foundation of security or a rocky foundation of insecurity. Building a strong foundation of financial knowledge and money habits can help your child mature and develop withconfidence.
#2: It all starts with you
Your kids will usually take over the habits, customs, or routines of their parents. When it’s all they know, it’s what they learn — and money is no different. Your values around money are reflected in your behaviors, and children catch on to behaviors quickly. Especially at a young age, they will emulate their parents’ actions because they are their rolemodels.
#3: Kids learn so quickly
Teaching kids about money early on won’t be nearly as difficult as saving the task for later, when they may have to un-learn some bad money habits. And as a rule, kids just process faster. Research suggests it takes most adults 66 days to build a habit. Kids have the luxury of just being kids and absorbing the world around them, including information and habits. Make their money experience an everyday habit so they catch on, and it’ll probablystick.
#4: Good money behaviors become a habit
Like driving a car becomes muscle memory and instinct, money behaviors also become second nature. The earlier they are taught, the faster they catch on, and, with frequent practice, the more routine they become. Becoming familiar with money and learning to count change, understanding both saving and purchasing power, and being comfortable inside a bank are all early foundational pieces of information that can grow into so many other financialopportunities.
#5: Knowledge really is power
Giving kids financial knowledge sets the tone for success. Knowing the basics at a young age — costs of expenditures, how to read a price tag, counting change, understanding the importance of both saving and giving — can help your child practice those important life skills while still safely under your wing. By the time they get out in the real world, they’ll be old pros. Paying bills, saving for major purchases, or buying insurance won’t be daunting, because you’ll have given them the tools necessary to be their own CFO. Now wasn’t thatsmart?
“Just as parenting isn’t a one-size-fits-all approach, neither is teaching about money skills.”
Kids come in so many shapes and sizes. As a parent, you know that they also differ mentally, emotionally, and developmentally. Just as parenting isn’t a one-size-fits-all approach, neither is teaching about money skills. You may have to test-drive a couple types of methods before you find one that they respond to. Just be sure to make money part of your day-to-day conversations. As money topics come up and your kids are around, include them as much as you feel comfortable. Talking comfortably about finances is an important part of helping kids develop a healthy relationship with money. Including them in conversations and actively demonstrating how to be financially responsible early on will help them cope with challenges like setting limits, planning a budget, and resisting impulse buys. The important thing is just tostart.
Interested on more info on teaching about money? You may find Teaching with intention: The power of allowance or Starting early: How to use allowance as financial education particularly helpful. Or, you can click here for downloadable resources — like a chore chart with ideas for age-appropriatechores.
