Teaching Your Child about Money

We all strive to provide the best for our children.  We hope that they enjoy everything that life has to offer and grow up to lead happy, productive lives.  One aspect of life that can help having a happy life is being prepared to manage your finances.  And what better way to  prepare your child for financial success than to educate them from an early age.

There are many lessons in life that are not taught at school.  The curriculum has changed over the past 20 years, but the lessons on finances and money are rarely taught in the classroom.  These lessons are often taught from watching and listening to your parents and family members.

Financial skills are made up of simple basic life skills and these must be taught from early in one’s life.  The skills are like building blocks and young children will learn from observing and making small decisions when they are young which will impact them for a lifetime.

There are three key concepts that together can provide children with a good foundation of financial life skills:

  • The differences between needs and wants
  • How to prioritize and make good choices
  • Understanding the consequences of those choices

Many times the teaching opportunity can occur when you are doing the everyday things in life.  Children often need tangible visual experiences with money to truly understand the “exchange” of money for goods.

Using cash when you shop will provide this lesson.  Tell your child stories to create visual images.  Take time to explain that each person has different needs and wants depending on their interests and values.  Provide tools to help with decision making and organization.  Encourage your child to earn and save money for those things that they truly want.

You do not need to be a financial expert to successfully teach your children about how to manage money.  But, by discussing basic money topics frequently during daily life will certainly help prepare them for their future.

If you are interested in receiving The Parents Guide to Kids and Money- Tips for Helping Your Children Get off to a Great Financial Start, please email me at [email protected]

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About Maureen Crimmins

Maureen Crimmins is co-founder of Crimmins Wealth Management and a fee-only independent financial advisor. Have a financial question? ASK MAUREEN

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