Financial Literacy For Kids
At what age should kids start learning about money?
I think it's important to teach children about money as soon as they understand the concept of value, which can be at a very young age. Teach your children to make choices. That they don't get everything that they want just because they can afford it, or just because you can afford it. There are times to say no, and there are times to have your child make a choice. "Do you want this, or do you want that? You can't have both. You can have one or the other." Also, encourage your children to start saving immediately. The old-fashioned piggy bank is a great tool, so that the youngest of children can take some of the money that you've given to them - or that their aunt, uncle or grandparents have given to them - and put it away. Get them in the habit of putting money away.
How can I teach my child to save money?
I remember when I was a young child, in our school we had a savings program. And every week we put coins into little slots and they ended up getting deposited into a savings account. And I used to love to get my little pass book back that showed every three months that I got interest income on my savings. To me it was free money and I loved to see not only my deposits grow but the interest on my savings grow. So that's a technique that can be used to teach children to save. It really requires parents to become involved, to ensure that each time a child receives money that it not be spent, that choices be made and the choices might be, I might buy a particular item but I'm going to take a portion of the money and I'm going to save it.
How can I teach my child to spend wisely?
The best way a parents can teach their children to be wise consumers and spend money intelligently is to set the example themselves. Unfortunately, there are too many adults in our society today who are not responsible with respect to handling their budgets or their credit. And, so, it's difficult for them to do it. But, the children emulate what they do. So, if you're are responsible about how you handling things then you expose your children to the processes that you go through when you're spending money and when you're making choices and decisions about where you going to spend your money. The children are going to absolve that and develop habits accordingly.
How can I teach my child good financial habits?
I think it's very important for parents to take a role in the financial education process. Some parents do resist it, partly because they have bad habits themselves and partly because they don't feel qualified to be able to teach good financial habits. But it has to start somewhere, and even if the parents aren't the best role models, they can at least provide resources for the kids so the kids can do better than they are.
How do wealthy families teach their children about money?
What we are observing with many of our clients who have enormous amounts of wealth, and I'm talking about 1 million dollars and up, that they are very concerned about how their children are going to be able to handle money as they're growing up, or when the children inherit that money and so these wealthy families do take a more proactive role in trying to see to it that their children are educated in how to save and how to invest and how to consume wisely. Often wealthy families use their own financial planners or financial advisors to give primers to their children about what it takes to be responsible about wealth.
