Money management is an essential life skill that everyone should learn. One day your children will need to learn to budget and manage their money effectively. So when is the best time to teach them these necessary skills?
From 3-5 years
The preschool age is the time when kids develop their thinking abilities using language and symbols. Memory skills are acquired and they demonstrate particular ways to reason and solve problems. At this age, kids can actually comprehend the concepts of money and saving.
Parents can start by gradually easing children into understanding what spending and saving means. For example, going to the shops does not mean that kids will always get something, even if it is just sweets. Teach them to wait for something that they want. Delaying gratification will help your kids later in life to be patient and wait to spend on something that they really want and not just trivial stuff. At this age, fantasy play helps resolve conflicts so this can also help in delaying gratification by pretending to set targets and goals.
From 5-7 years
Your child will begin to develop skills that will teach them to be independent. It is also during this period that kids will learn the basics of reading, writing and simple maths. To complement this developmental stage, you can include them in financial decisions real life situations such as buying groceries, why you would choose one product over the other or prefer to go to a particular shop. At this point, giving an allowance or letting them earn money by doing simple tasks can help immensely in grasping solid concepts of money and saving as well as making decisions on how to spend that cash for something they want or need.
From 7-12 years
According to the report prepared by University of Cambridge researchers Drs. Whitebread and Bingham for the Money Advice Service, money habits of children are developed by the age of 7. The role of parents in money skills management during this period is still very important.
From 7 to 12 years, children have more complex intellectual capabilities, but still rely heavily on parental support and guidance. They are eager to learn new things and respond well to advice about safety, lifestyles and avoidance of risks. This is actually a great opportunity to cement the concept of saving, creating money and curbing spending habits. You might open a savings account in their names or keep a sealed box for stashing money they receive or earn. Encourage your kids to think of ways to make and save money like selling their old stuff or art creations, swapping games instead of buying new ones, donating used clothes for tax rebates, dog walking and so on.
It is never too early to teach your children the value of money and how to use it wisely. Teaching your children about money management can make them more responsible adults.
