Teaching kids about money management at any age and every age


Date: September 12, 2018

As a parent you understand the importance of successful money management firsthand. Every bill must be accounted for and budget balanced. It’s the only way you can manage your household and save for those bigger events in life. Your kids, on the other hand? They are not quite so money savvy and you’d like to change that. After all, smart money management will help them throughout their entire lives. So how do you teach these skills to your kids?

While every child is different, the age of your children can play a big role in how you teach them money management skills. So, to help you guide your kids down the path to fiscal responsibility and successful long-term money management, follow these tips from VantageScore Solutions.

1. Ages 3-5: Starting small with small conversations

Young family with piggy bank


How

early can you start talking to your children about money? Earlier than

you think. In fact, in many cases once a child is old enough to take

part in conversations (speaking and listening) they are old enough to

discuss money. Explain to them that things they see in the store — and

invariably want — cost money and if they don’t have money they cannot

get them. This is also a great time to introduce a piggy bank and

discuss why you’re placing money in the piggy bank with your child.

2. Ages 6-8: Leading by example

Mom at ATM with kids


Children

at this age are incredibly observant of the world around them and they

are old enough to ask detailed questions about the things they see —

including how you handle money. Trips to the bank are a good way to show

them the value you place in saving money and don’t be afraid to put

things back at the store when they aren’t necessary. They will benefit

from seeing it’s OK not to buy something.

3. Ages 9-10: Make learning fun

Family playing monopoly


Children

at this age are able to grasp more in-depth concepts and they love

games. Use that to play games with your child that stress the value of

saving and money management in a fun, interactive way. Whether you play

through board games, like Monopoly, or through video or online sources,

games where your child can win by being smart with their money will

offer long-term benefits.

4. Ages 11-13: Learning to work for wages

Son walking dog


You

may have already been giving your child an allowance based on their

completion of household chores but now is a great time to help them get

work outside of the home. Whether it is walking dogs in the

neighborhood, babysitting or mowing lawns, your child has the chance to

bring in real income at this age. And when they do, sit down with them

to manage it properly. Open a savings account for them and show them

that some money needs to be set aside for savings and what portion can

be enjoyed immediately for spending.

5. Ages 14-18: Strategies for long-term savings

Father and teenage son talking


With

teens, a successful conversation is often all in how you frame it. Ask

your teen if they want to sit down and plan out their budget and you’ll

get a no. Ask them if they want to sit down and figure out how they can

buy their first car, the laptop they want or go to college

and they’re more apt to listen. Start with the goal in mind and

backtrack from there to set a fiscal budgeting plan. Teach them the

difference between gross and net income, thus budgeting and spending

should be based on one’s expected net income, not gross income.

Encourage your teen’s ideas throughout the process and they’ll take more

ownership over the plan.

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