Finances aren’t just an important part of a well-rounded education, they’re a critical life skill. Everything from owning a car and buying a house to purchasing groceries and raising a family critically depends on a variety of different fiscal capabilities.
The two-part question that naturally follows is, when do you start teaching your kids about money, and in what order do you present the topic? After all, teaching a child about “finances” could refer to something as simple as explaining how cash works or it could be talking about things as complex as investing in stocks or estate planning.
Here are a few suggestions for major financial topics that you should try to address at various ages in the educational process. While not necessarily comprehensive, they can serve as starting points from which you can launch into whatever monetary lessons you feel your child is ready for at the time.
Young Kids and Money
Believe it or not, you can begin teaching financial literacy to your kids from the moment that they start walking. Of course, this doesn’t mean you should dive into teaching them about compound interest or tax forms. When your children are just beginning their financial journey, try to focus on things like:
- Identifying the kind of learner they are, such as visual, auditory, or kinesthetic.
- Finding resources that can help you teach them about money via their ideal learning style.
- Focusing on financial fundamentals like recognizing coins and bills.
- Honing your child’s fledgling arithmetic skills.
- Demonstrating financial transactions through activities like playing “restaurant” or “grocery store.”
At this stage, the goals should be cultivating a general association with fundamental money concepts and connecting money and math.
Elementary and Middle School Kids and Money
As your child enters elementary and middle school ages, strive to begin embedding basic monetary concepts into their everyday activities. For instance, you can:
- Take them grocery shopping with you and explain things like prices, discounts, coupons, and cashing out.
- Begin to give your child jobs that they can use to earn a small income (i.e. an allowance).
- Help teach them about cash flow, savings, and basic budgeting with their own money.
- If you prioritize things like homesteading or self-sufficient living, explain why you live frugally and how it impacts your finances.
At this stage, your goal should be to associate your child’s growing understanding of money and finances with the life activities that are going on around them every day.
High School Kids and Money
By the time your child reaches the teenage years, money isn’t just a fun topic of discussion, it becomes an essential part of the conversation. At this point, it’s time to start challenging your child with the fiscal activities that they’ll be tackling on their own before long, including:
- Adding your child as an authorized user on one of your smaller credit card accounts — you can typically do so when they’re under 18.
- Helping them open their own credit card when they’re 18 to let them start building their credit.
- Teaching them to set aside income to pay their taxes and showing them how you file your tax returns.
- Expanding their budgeting skills to include rainy day funds, short- and long-term financial goals, and paying down debt.
- Helping them learn about making investments and paying taxes on capital gains.
- Showing them how to take out loans and helping them understand the power of interest — both on borrowed and invested money.
- Beginning exploring the cost-benefit analysis of different higher education options.
- Having them earn their own income with a part- or full-time job.
By this time your teenager is on the cusp of adulthood, and the financial lessons should be both detailed and varied. They may feel overwhelmed, but they should tackle these more difficult fiscal lessons while they have you by their side.
This can help them avoid potential future mistakes and can also reward them down the road by helping to establish both good credit and healthy financial habits, in general.
Teaching Your Kids About Finances
Financial lessons are critical to a well-rounded education. However, they can also be overwhelming and even downright exhausting. If you want your kids to grow up with good money management skills, you should help hone their financial literacy slowly and steadily throughout their time in school. To summarize:
- Begin introducing them to money and connecting it to basic addition and subtraction while they’re still in diapers.
- Then, as they get into elementary school, begin to connect finances with everyday events like shopping and even money-saving activities around the house.
- Once your child reaches their teen years, it’s time to turn up the heat. Teach them about things like credit, investing, and paying taxes.
If you can manage to foster a deep understanding of finances throughout your child’s education, you’ll be equipping them with one of the most important tools that they can take with them as they launch into their own individual adult lives.