As parents, you want to figure out the appropriate time to talk to your child about money. According to a release by Centre for Financial Security (mentioned in a Forbes article dated June 2014), it has been found that children start understanding different concepts of finances between 6 to 12 years. So, you can decide on the right age to start teaching your child about money matters.
The concepts of saving, investments, calculations are difficult, but if they start understanding thing early in life, it will help them later. Moreover, teaching these basic concepts also helps them in their academics and day-to-day lives.
Teaching kids about numbers can be tedious and difficult, but not impossible. Kids understand the concepts of counting at around 2 years, and gradually they understand that we give money in exchange for things. So, you can start with the concepts of exchange wouldn’t around the age of 4 years.
Here Are A Few Simple Ways To Teach Your Child About Money:
Board games are an effective way of teaching your child about money. Games like Monopoly, Pay Day and others are fun ways to learn about money exchange in the real world. Cash Flow is another similar game, but for kids of 14 years and above. Engage and involve them in such board games. You can also make a story with their favourite characters to explain the concepts.
Earn Your Allowance:
Let your kids earn their allowance and understand the concept of exchange. For example, you can decide to give a certain percentage of the allowance for free, but for the other half, they need to complete a task.
Take Them Shopping:
Taking them along for shopping or letting them shop when they are a bit older helps them to learn how monetary transactions happen in the real world. Start with small amounts and them them handle the money exchanges at the counter. If they are going alone, check the balance when they return and correct them if they are wrong.
Let Them Plan:
Encourage them to make their budget of their budget and teach them the basics of planning. This also helps them to learn concepts of savings, loan, etc. and how to handle money.
Your Habits Matter:
You also need to exhibit the right money habits for your child to learn from them. You need to talk about money effectively when you are talking in front of them. Teach them about good values of money and how to use it effectively. They will look up to you for their financial decisions and you need to guide them in the right way.
As your child grows, they will be able to understand different financial aspects with new and better ways. So, it is better to start early and not wait for the ‘right’ time. Parents should be their first teachers about these sensitive money matters, rather than the world outside. What they learn from you will always help them use it for better external execution.