Setting children up for success is a common goal shared by many parents. However, educating them about finances can be just as important as teaching them basic skills like reading or riding a bike. Money can be a complex topic, especially from a child's perspective, so how can we ensure they grasp its concepts? Here are some valuable tips for instilling money management lessons tailored to your child's age:
Younger than 5 years old
Involve your kids in financial discussions and decisions. Include your kids in daily money discussions and activities like grocery shopping, trips to the ATM or your financial institution, and outings to movies or restaurants. Show them the significance of saving and the art of distinguishing between needs and wants.
Tip: Create a pretend store at home to teach your child about money and the difference between needs and wants through interactive play. This activity helps with coin recognition, counting, and understanding financial concepts.
6 to 12 years old
Involve your kids in shopping based on a budget. Let them help make a list, choose items wisely, and discuss cost differences. Review the receipt at home to see if the budget was met and emphasize the importance of essentials over extras.
Tip: Use three jars labeled saving, spending, and donating. Encourage your child to divide money received or earned among them, teaching wise money decisions, mindful spending, and giving back.
13 years old and older
Introduce financial responsibility. Encourage teenagers to take on regular expenses such as their cellphone bill, setting aside a portion of their allowance for budgeting practice. Assist them in understanding income calculation, expense deduction, and the importance of adhering to a budget to cultivate financial independence and empowerment.
Tip: Help your children set up savings and checking accounts to enhance their financial management abilities. This step will enable them to handle their finances effectively, pay bills, use debit or credit cards, budget wisely, and gain knowledge about digital banking.
Start Them Saving
Learning to save is an excellent lesson for any age. Open a savings account with your child at Magnifi Financial Credit Union, where they can watch their savings grow with them. Learn more about our Youth Savings Accounts at https://mymagnifi.org/accounts/youth-savings.html
