1. Start Early
The earlier you start talking to your kids about money, the more time they will have to understand and develop healthy financial habits.
2. Use age-appropriate language
Ask them questions to see their level of understanding. “How do credit cards work?” Explain financial concepts in a way that your child can understand based on their age and level of comprehension.
3. Lead by example
This is a tricky one but being transparent and open about where you can improve also helps. Tell them about a financial decision you had to make and what went into making that decision.
4. Teach the basics of saving, spending, and giving
Teach your child the importance of saving a portion of their money for future needs, spending wisely, and giving back to others.
5. Encourage hands-on learning
Encourage them to set goals and to make difficult decisions,” I only have $10, I can’t get stickers and the pins, which should I get or should I save it all for my goal?”.
6. A sunny day fund
Also remind them that unexpected things come up and if they have a “sunny day fund” they will have the $ to get/do the thing. Maybe they should have a minimum amount that they always keep as a backup.
7. Be open and honest
If your family is facing financial challenges, it’s important to be open and honest with your child about the situation. Teach them the value of budgeting and making do with what you have. While they may not get to have a say in your decisions, being transparent with them about the process will teach them by example. Money should not be a taboo topic in your household.
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