1. Start early: A 2013 Cambridge U. study found that by the age of 7 (1st grade) most children grasped how money works and ‘core behaviors” they take into adulthood. Teach them the “rule of 72” (amount of time it takes a lump sum of money to double based on a known/fixed interest rate) as early as possible.
2. Utilize an allowance to teach them: Using an allowance as early as possible helps teach them the value of money and the difference between luxuries vs necessities.
3. Talk openly about money: Kids learn about money faster than you think. Talk to them about how many weeks of allowance it takes to buy that new lego set and you will be surprised how fast they understand. Not comfortable on this topic refer to Parents.com
4. Let them make their own mistakes: This can be the best way to learn when the stakes are low. When your child sees this great commercial on tv let them buy the toy with their allowance money. When they realize it was a bad purchase the lesson is invaluable.
5. Set a good example: Your children see what you are doing and will emulate it good or bad. Let them see you save up for a luxury and put back goods that you don’t need while at the check-out counter.
Parents often say “I want my kids to be better than me”. Utilizing these 5 tips will help ensure this happens with regards to saving and responsible spending.