Teaching kids about money is important, experts agree — and the earlier you start, the better. Legendary investor Warren Buffett says even young kids can grasp key money concepts.
"Sometimes parents wait until their kids are in their teens before they start talking about managing money — when they could be starting when their kids are in preschool," the Berkshire Hathaway chairman and CEO said in 2013.
Reading kids' books together that have money themes can be an easy introduction to the topic. So can engaging with some of kids' very first questions on the subject, like "What is money?" "Where is money made?" and "How do we get the money from banks?"
This video can help you have some of those first conversations, and it also offers a few kid-friendly activities that help put key money concepts into action. In the video, host Dottie Squirrel makes a classic suggestion of starting to teach your child money management with three jars, labeled "spend," "save," and "share." That visual helps kids see their money building up toward their goals.
Video by Euralis Weekes
Base your timing for teaching kids about money on their growing interest in the subject, rather than waiting for them to reach a specific age, Paul Golden, a spokesman for the National Foundation for Financial Education, recently told Grow. "As soon as your child demonstrates an interest in saving money," he says, "that's the time to take advantage."
As your kids get older, you'll find more and more opportunities to help teach them about money, from playing games like Monopoly to getting hands-on money experience with an allowance. And, by the time your child is in elementary school, it may be time for them to graduate to a real savings account with an ATM (not debit) card. When they have more regular income to manage, it's time to think about working in a debit card and, eventually, a credit card.
And remember that even when you're not offering up a formal lesson, you're still teaching your kids about money just by managing your own. That's because they're watching what you do and learning from you. So make sure you show that you believe in making smart money choices yourself.
"I always say that 'more is caught than taught,'" Rachel Cruze, a financial expert and co-author of "Smart Money Smart Kids," recently told Grow. Kids "need to see you living out the principles you're teaching. If you're teaching them not to take on debt, but they see you swiping a credit card, they're going to pick up on that."
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