When spending time with your children, many moments throughout the day can afford opportunities to incorporate fun ideas about money, finance and investing. The key is to take into consideration your child’s capabilities, but no matter if they are a preschooler, pre-teen, teenager or college student, there’s something they can learn about money.
From a very young age, preschoolers can grasp the idea of counting, and this game can be played numerous times. In the car, a four year old can count trucks that pass on the freeway. In the grocery store, he can count the number of fruits and vegetables you buy. At home, she can count the number of blocks or toys.
By second grade, kids can grasp concepts such as saving and spending, needs and wants. An allowance helps them understand the value of work. Give them a piggy bank to encourage saving for an item to buy in the future. Have conversations about what are truly “needs”—like food, water and shelter—and what are considered “wants.” Give them examples of what you consider “wants” and ask them to name some of their wants.
Stay Elementary in Elementary School
While a child is in elementary school, keep it simple. Kids love to play “store” with fake money, pretending to buy and sell toys to friends and taking turns being the customer and the cashier.
Help them understand banking and saving their money by opening a bank account for your child. Talk about the benefits of keeping their money in a bank compared to in the piggy bank in their bedroom.
By the time your child gets to middle school, the conversation can become a little more advanced, including talking about what your child’s financial goals might be. Likely, they will be short-term goals, such as saving up to purchase the latest game system or smartphone. Use tech gadget purchases as opportunities to discuss not only the expense of the item itself, but any additional monthly bills or charges that may result. Before making any large purchases, involve them in comparison shopping, discussing the importance of making thoughtful, well-researched decisions.
Teenagers will likely be taking economics or other math classes that build on their knowledge, but that’s no reason you can’t continue to discuss the concept of credit cards or budgeting, especially as this is the time that many teens take on their first part time job. At this age, you can even start to instill the idea of charitable giving by creating a spending plan to give part of their allowance or savings to a charity. Encourage your teen to check out charitynavigator.org to find an organization that is near to their heart.
When it comes to budgeting, saving and investing, there’s no idea too small to incorporate into your daily discussions or routines with your children. Starting while they are young and encouraging them to ask questions along the way will help your children become more confident with financial matters as they reach adulthood.
Securities offered through M.S. Howells & Co., Member FINRA/SIPC. Advisory services offered through Jemma Investment Advisors, LLC, a registered investment advisor. M.S. Howells & Co. and Jemma Investment Advisors, LLC are not affiliated.