If money doesn’t grow on trees, it must come from an ATM, right? From a child’s perspective, that’s logical. Have you ever told a child you were short on cash only to be met with the wide-eyed response, “Just go to the ATM!”
It’s amusing a child would think that money is just dished out for free from a machine, but the deeper issue is, children should be more knowledgeable about how money works and where it comes from. The key to a responsible financial future is a solid educational foundation that starts at an early age.
Good money habits aren’t genetic. They don’t happen automatically, they must be taught. As proof, a recent survey showed that less than half of all young adults pay off their credit cards every month. That means interest could be eating up their ability to save. These same young adults don’t have rainy day emergency funds, or have a good understanding of the stock market and how it’s used for investing. This could all be the result of a simple lack of financial education.
To help head off any harmful repercussions from a lack of financial know-how, you can teach your children the ways of personal finance as early as kindergarten:
You can teach kids about the magic of compound interest by putting a dollar in a jar and adding 10 percent interest each night/week/month. Here are some other things to think about doing:
Learning about money can be fun. Here are some activities you can incorporate into your everyday activities:
To ensure your child grows up to be fiscally responsible, there are a number of things you can do. These include keeping an open dialog about money (both yours and theirs) and setting a good example by sharing good money habits. But the most important point of all is, start early! The sooner children understand money and its importance in day-to-day life, the better their chances of having a healthy and productive financial life.
For additional information on children and money, check out The Institute of Consumer Financial Education’s website. And here's another resource: www.moneyinstructor.com/coins.asp.
test
Comments
Post new comment