With money being such a big thing in the world, it’s surprising that not many educational institutions teach our children about it. It falls on us parents to educate them about important financial lessons they can use to navigate life.
5 Valuable Age-Appropriate Money Lessons to Teach Your Children
1. If there’s something you want, you may have to wait longer to buy it.
For ages 3 to 5 years
The concept of delayed gratification is something not everyone gets. In an age where people are all about instant gratification and satisfaction, holding out on purchasing something you think you need or want goes against the grain of how society spends.
Teaching your children the value of waiting can help them make financial decisions that aren’t based on emotions or impulse. It also teaches them the importance of patience and how it plays a major role in life.
2. You will always have a choice.
For ages 6 to 10 years
At this age, it is best to start teaching your children about the concept of wise spending. They need to realize that each decision will have different results and consequences. They have to understand that money is limited and once they spend what they have, they will need to wait for some time to get the same amount.
At this point, teaching them to carefully weigh their options and the pros and cons of each choice will help inculcate in them the skill of making well-informed financial decisions, a skill they will need to help them navigate through life and set them up for success.
3. The earlier and the more you save, the faster and the bigger your money will grow from compound interest.
For ages 11 to 13 years
At this point, you should teach your children more about how the world of finance works. They need to graduate from the elementary teachings of money and get to the next level of financial knowledge.
It may be too early to talk to them about a low-spread Forex broker or the bear and bull markets, but you can teach them about the effects of saving as early and as much as possible.
4. Consider the costs of going to college.
For ages 14 to 18 years
This is not to discourage your children from going to university. This is another valuable money lesson they need to learn at this age.
Education is costly but those with a college degree have better chances of earning more compared to those who aren’t as fortunate to go through the season of higher learning. They need to understand that their choices will entail different financial impacts that could affect their whole lives.
Now, this is not to say that they need to decide which college to go to based on the price tag but this is to serve as a guide and perhaps even a reminder that education is one of the most worthwhile life investments they can take.
5. Only use your credit card if you can pay it in full each month.
For ages 18 and above
How many times have we seen people go down the credit card rabbit hole? These are the people who viewed credit cards as a status symbol rather than a helpful tool. You need to teach your children that part of growing up is becoming responsible for everything that they have and using it wisely, credit cards included.
Teach them how to manage it properly and only use it if they can afford to pay off the balance within a month and not a day longer. Teach them about the harsh realities of credit cards, interest rates, late payment fees, and credit scores.
Let’s help our children avoid our financial mistakes and set them up to succeed in life by preparing them as early as now.