Allowances and chores don’t exactly result in a fortune for children, but even at a young age, it’s never too early to start teaching them how to handle money responsibly. According to a study by the University of Cambridge, children typically develop financial habits by the time they are 7 years old.
If you are a parent, it’s important to teach your kids smart and safe financial habits:
- Give your children an allowance and let them learn first-hand what it is like having money.
- Discourage impulsive spending by creating a budget and outlining what you plan to buy before going shopping.
- Emphasize the importance of saving by explaining how savings accounts and bonds can help even a weekly allowance grow over time.
- Let your children experience saving by opening an account for them—many banks offer children’s accounts that have no fee and no minimum balance requirement.
- Teach your children to be skeptical of advertisements and sales tricks by pointing out when certain deals or offers might have a catch.
- Simulate a borrowing experience by lending your children money and establishing a date by which they must pay it back in order to avoid accruing interest.
Teaching children anything takes time, effort and patience, but it is important for them to grow up with the knowledge and skills to be responsible with money.