Financial Literacy for Kids: 10 Effective Ways To Build Good Money Habits
Financial Literacy for Kids
As parents, we know that financial literacy for kids is critical. But how do we get started? Here, I’ll answer these questions by sharing ten ways to build good money habits in your kids.
1. Model Good Money Habits
Children constantly observe and learn from people and the world around them. first of all, smashing the taboo of talking about money. Instead, show your kids how you save, spend, invest, track, budget, and so on. Over time, your daily modeling of good money habits will lead to your kids internalizing these crucial skills.
2. Teach Your Kids How To Save
For the youngest of kids, it works best to do this in a tangible, tactile way. A fun way to do that would be to pick out a piggy bank together, then deposit money they earn, find, or receive.
3. Teach Your Kids the Basics of Investing
Here are some age-based ideas for how to instill investing knowledge: 1. – Point out public companies they’re familiar with (e.g., Disney, Mattel, Apple). 2. – Explain what an index is and the main indexes they’ll use when investing. 3. – Teach them how to buy and sell stocks and ETFs.
4. Help Your Kids Start Investing
Eventually, your kids will be old enough to manage their investments. You can get them started with an investment account much earlier—perhaps as soon as they have some extra birthday or holiday money.
5. Go Shopping Together
This seems completely counterintuitive, right? How can shopping with kids teach them to be good with their money? You can weave in financial literacy lessons by showing them how you spend less on the things you need to buy.
6. Encourage Delayed Gratification
I firmly believe that being able to embrace delayed gratification is foundational to becoming successful with money. Through delayed gratification, kids learn to: 1. Develop a long-term mindset. 2. Make money decisions thoughtfully. 3. Avoid impulse spending.
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