A major role of parenting should be teaching kids about money. For many reasons, parents drop the ball in this area and raise children who carry an improper understanding of money into college and adulthood. This leads to challenges as the grown children seek employment, earn an income and determine how to manage their financial lives.
What children should learn about money varies depending on their age. A five year old needs to hear different messages from the parents than does a teenager. However, there are three fundamental money lessons that every child needs to learn no matter what the age:
1) to save money for future needs,
2) to spend money wisely and
3) to give generously.
These three principles serve as the foundation upon which other money lessons build.
There are differing opinions about when to start teaching kids about money. Many say kids as young as three can start to learn the basics. In our home, we waited to get serious with money lessons until the age of five. We found that our children understood the concept of giving at an early age but struggled with saving and spending. By the age of five they were better able to grasp those last two concepts and understand their importance.
Teaching Kids About Money at Various Ages
Aside from saving, spending and giving, what should children learn about money and at what ages? Here are the four big lessons we are hoping to impart as we are teaching our kids about money:
