Children can become financially literate at an early age by learning age-appropriate money concepts. Here are seven reasons to start teaching your kids about money today:
- Builds future financial success. Early learning about sound financial habits leads to financial success later in adulthood.
- Forms good financial habits. By age three, kids can understand money concepts. Our approach to money, such as planning and delaying gratification, is set by age seven.
- Teaches wise spending habits. Simply giving kids money, such as an allowance, does not teach them to make wise spending choices. They also need guidance on saving and budgeting.
- Supports delayed gratification. Kids should learn to not buy things unless they have the money. They may not have enough money to buy an item right now, but they can learn it is within their reach if they set aside money regularly until they have enough to purchase it.
- Builds independence. It is normal for kids to not want their parents to control everything they do. By saving their money, kids decrease their reliance on their parents or anyone else to handle their purchases.
- Allows money to grow. Kids can open an interest-bearing account at a bank or credit union where they will be paid a small sum of interest on the balance. With compounding interest over a long period of time, kids can see their savings grow exponentially.
- Gives a sense of accomplishment. By saving, kids can set a goal with a reward for meeting their goal. When kids save, they learn to see the world and their life for what it could be, not for what it is. This way of thinking is a key to staying inspired, motivated and strong.
Saving is something every kid should do. It enables them to buy items that otherwise might be out of reach, keeps them out of financial trouble, and makes them more independent. Often, it means they can do more, as they will have more choices or see their money grow. Subsequently, they will feel happier. Most importantly, saving teaches that their dreams are achievable by setting goals and planning ahead. By saving, kids can make things happen!