Many parents are prudent about teaching their children to read, write and do math. But educating kids on money management while they are still young is equally important. You may ask, “How young is too young?”, but if you introduce the basics at an early age, kids are more likely to listen and hold on to these lessons.
A recent study conducted by TD Bank reveals that children who were taught about budgeting, saving and credit from their parents feel more confident in their financial tasks. Nearly 70 percent of young adults who were taught about money management from their parents remember opening their first bank account at an early age. Fifty-seven percent of participants who are considered financially literate can even remember the amount they first deposited.
“The poll reveals that it is imperative for parents to act as the primary role model to their children if they want financially successful children,” TD Bank retail sales strategy executive vice president Suzanne Poole said. “Starting financial literacy lessons early results in adults who are more confident in their money decisions, are more financially literate and are more skilled at saving money.”
You don’t have to teach them how to balance a checkbook in between bottles and nap time. But there are many activities you can start with them when they’re young.
When you buy board games, pick up fake dollar bills and coins too, and play banker with your children. This will give them a basic understanding of money and how it works.
Buy a piggybank to hold loose change and allowance money. Let them open it every few months so they can see how quickly savings builds up.
Don’t forget to reward them. Take them shopping and show them how to compare prices and search for good deals.
As they get older, show them your bank statements and let them see firsthand how interest accrues.
Eventually, taking your son or daughter to the bank and opening a child savings account will encourage them to save and allow you to help them make financial goals.