Teaching kids about moneySubmitted by Financial Planning Solutions, LLC on October 4th, 2018
At some point in your child’s (or adult child’s) life you may have a conversation about money. As parents we know we need to teach our kids about money but there never seems to be a good time, place or way to impart good money habits.
There are good money books for kids which you can try to stuff in their Christmas stocking or give to them on their Bar Mitzvah, but will they actually read them?
You can sit them down before they head off to college and try to give them a talk about responsible ways to handle money when they are away and hope that they follow your advice. With a credit or debit card in hand, how can they resist buying pizza for all of their friends in the dorm?
When they are younger you can play Monopoly or Settlor’s of Catan (our teenagers relish playing this game with their cousins on summer vacations) to teach the value of land, goods, and materials. But is a board game good enough for real life?
You can send them to a class offered through their school or career day (I present financial planning each year at the middle school in our town). But are they really absorbing abstract concepts like debit/credit cards, money market funds and mortgages at 8:30 in the morning? Hard to say.
Over the years that I have been trying to teach my own kids about money for the day when they have to make their own financial decisions, I don’t think it’s a one-shot deal.
But you better start soon. A recent article by Beth Kobliner for the PBS New Hour reported that money habits are set by age seven.1 Now that doesn’t mean you should give up if you youngest is now 21. It just indicates that kids learn money habits early.
Keep in mind that the most important influence on a child’s money habits are the money habits of their parents. So, you’re in the spotlight. Want to teach your kids about money? Like everything else—do your best to set a good example.
A good way to teach is to involve your kids in purchase transactions so that they can start to see how money works and how sellers try to get you to pay as much as possible for things you really like.
Want to talk about other ways to build good money habits? Give us a call; we’re here to help.
1 Kobliner cited a 2018 study by psychologists at Purdue University. For the full article, go to https://www.pbs.org/newshour/economy/making-sense/money-habits-are-set-by-age-7-teach-your-kids-the-value-of-a-dollar-now
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