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Teaching kids about money: What’s the right age to start?
The ideal time to begin teaching children about personal finance might be earlier than you assume.
When it comes to educating your kids about money, it is never too early to begin. Naturally, the complexity and depth of these lessons will depend on their age.
Here is why you should start discussing finances with your children immediately, along with how to tailor those conversations to their specific age group.
The benefits of teaching kids about money early
According to a recent survey conducted by U.S. Bank and Morning Consult, approximately two-thirds of parents report that they have already begun—or intend to begin—teaching fundamental money management concepts before their children reach age 12.
“Today’s parents are the first generation where a majority are choosing to have open conversations with their kids about money — and at an early age,” said Arijit Roy, head of consumer and business banking products at U.S. Bank, in a statement.
For instance, the survey revealed that 62% of Gen Z respondents engaged in these types of financial discussions while growing up, compared to less than half (49%) of baby boomers.
Research indicates that Federal Reserve Bank of New York discovered that individuals who received compulsory financial education in high school were more likely to make sound financial decisions as adults than those who lacked such instruction.
However, experts emphasize that parents should initiate these dialogues at home rather than relying solely on schools to handle the responsibility.
“Kids start forming an understanding of money and begin developing their own money habits far earlier than parents might realize,” said Alaina Trivax, author of Follow the Money and founder of financial literacy platform Let’s Make It Grow. “We already teach our kids values like kindness and respect, and about how to ride a bike and brush their teeth. Financial literacy skills belong on that same list.”
What are some age-appropriate money lessons?
Helping your child learn about finances does not necessarily require formal, sit-down lessons. Parents can utilize everyday teachable moments as opportunities to discuss money. Even children as young as preschool age are capable of grasping many of these concepts.
For example, during their younger years, you can start by explaining why parents go to work, how income is earned, and how that money helps the family cover daily expenses. These initial talks can eventually lead to more in-depth discussions regarding <a Take them grocery shopping with you for a few easy lessons. Try handing them a name-brand and a store-brand cereal box, and point out their different prices," Trivax explained. "Ask your child why one might cost more, and if the difference seems worth it."
The bottom line
The path toward making smart financial decisions begins at home. Parents have the chance to use routine purchases, errands, and financial choices as lessons that can influence a child’s economic future—and you do not have to wait until they can count currency to get started.
The sooner these conversations commence, the more time there is to establish solid habits and decision-making skills that will serve as a foundation for a more secure financial future.
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