How young is too young to learn about money? The answer to that question— it is never too early to teach your children about money. At every stage of their childhood and adolescence, you can use a different medium or technique to teach your children financial lessons.
The personal financial lessons you teach your children in their childhood will lay the foundation for their money habits throughout their lives. However, the critical question— is which lesson to teach at what age? While teaching a five-year-old child about different personal wealth management options would be a difficult thing to pull off, you could teach the same to a teenager with little effort.
Wondering if you have to create a detailed lesson plan on personal finance and how to make your children understand it? We bring you a comprehensive finance lesson plan for your children. All you need to do is follow the suit.
Here we go:
You do not need to sit with your children specifically to teach them about money and spending habits. You can instil critical lessons about personal finance through everyday practices. Remember that your children pick up a lot of their habits from observing your behaviour. Hence, primarily, you need to inculcate and practice all the lessons you teach your children.
At the age of 3 to 5, you may not be able to teach complex financial concepts to the children, but you can form their purchasing patterns. Waiting to buy something you want—-an idea that is difficult for even adults to follow— can be introduced to children from a young age.
While you continue with your three jars, you need to separate your financial lessons once your children reach the age of 6. Apart from saving and waiting to buy something they want, it would be best if you also inculcated the habit of making the right choices to spend their money and start involving them in your financial decisions.
At this age, you can introduce more mature subjects to your children. By now, they have already learned to save for the short term. Hence, you should now get them acquainted with the concept of compound interest and long-term savings. The sooner you start saving, the better your long-term results would be.
By this age, you need to start planning for your children’s educational expenditures. The tuition would highly depend on the college and the type of degree you would choose. Developing a financial plan for your children’s college would be primarily based on your awareness of average tuition fees for the college.
Now that your child is all on himself or herself, it is time to impart the knowledge about how to use a credit card. Use the credit card only if you can pay it in full each month. If misused, credit cards can hamper your children’s credit history, which would impact his/her financial future.
To reiterate, before you teach the aforementioned lessons to your children, ensure you practice them in your life. They will eventually follow your example and look up to you for financial advice. While you teach your children about streamlining their finances and making the most of out it, safeguard their future with smart investment plans. Take your first step towards a prosperous financial future by taking a free portfolio analysis today.
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