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Financial skills are a vital component of living an adult life, yet so few children are learning the necessary money lessons to survive adulthood. Thus, money lessons for children are really important to get them more financial skills.
Start from the very young age, children should know how money comes, works, and finishes. Otherwise, they are often thrown into their adult life scraping to figure out how to survive paycheck to paycheck and learning how to manage money through trial and error. While it’s important for children to learn lessons through trial and error, even as a young adult, they shouldn’t have to struggle as much as they often do. Today I am going to tell you the 10 money lessons for children to learn before they head off to college and live away from home.
Before we start, I would like to share some books you can read to children about money lessons.
Alexander, Who Used to Be Rich Last SundayLittle Critter: Just Saving My Money (My First I Can Read)Curious George Saves His PenniesThe Berenstain Bears Piggy Bank Blessings (I Can Read!/Living Lights)
10 Basic Money Lessons for Children
- Wait to Purchase Wants – your child can grasp this concept as young as age 3 but more appropriately by age 5. A great way to teach this money lesson is to have three jars for your child to save change in. Each jar will have its own separate label; “Saving”, “Spending” and “Sharing”.
- The Art of Saving – with the labeled jars referenced above, you can work to teach your child the necessary money lesson of savings. Have your child split any money or loose change they earn during their week into the three jars evenly.
- The Art of Sharing – it’s important to teach your children how to give back to the community. The sharing jar as referenced above will help teach your child the money lesson of giving back to others. It’s important to reach your child how to give back as well as spend on their own wants and needs.
- Wise Spending Choices – teach your child the concept that money is a finite item, not something that is always available, they must work to make money and in turn learn to spend that money earned wisely.
- Compound Interest – teaching your child how to save money and eventually setting them up with their own savings account is important. It’s important to teach your child that saving money in their bank account will earn interest, so as long as it stays there long enough.
- Money is Earned – the most important lesson you can teach your child about money is that it’s something you earn, not something taken. You can teach this money lesson by only giving your children money that’s been earned, rather than handing money over for no reason.
- Credit Score – you’ll want to be open with the discussion about credit scores and how important this number is to opening doors for your child as an adult. If you spend money wisely and borrow wisely, you will have a good credit score which means more opportunities.
- Thrifty Shopping – it’s important to teach your child valuable lessons in spending money wisely. Introduce your child to secondhand and thrift stores so they can see how beneficial these types of stores are when it comes to spending their own money.
- Paying Bills – while your children may not have any bills, you can work out something to teach the concept of bill paying by involving them with your bill payments every month. Have your child sit with you when you budget and set aside money for bills so they can see this process.
- Risks of Credit Cards – lastly, you’ll want to address credit cards with your child so they’re not tempted to get into debt immediately on entering adulthood. They should know how to use a credit card responsibility before they head out the door to live their adult life.
Many schools aren’t equipping students with the necessary money lessons that every child should know. When you are homeschooling your child, you can easily work with these 10 money lessons during your school sessions. Try to implement a money lesson curriculum into your homeschool sessions as early as first grade.
Looking for more money lessons for children tips you can use? Here are some books you might like to check out:
Make Your Kid A Money Genius (Even If You're Not): A Parents' Guide for Kids 3 to 23Financial Peace Junior Kit: Teaching Kids How to Win With MoneyToday I Teach Financial Literacy: Family Money Management WorkbookThe No-Cash Allowance: A Practical Guide for Teaching Your Children How to Manage Money (Mom's Choice Award Recipient)Money Doesn't Grow On Trees: A Parent's Guide to Raising Financially Responsible ChildrenThe Art of Allowance: A Short, Practical Guide to Raising Money-Smart, Money-Empowered KidsLife with Bunky:Chores and Rewards
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