[April 03, 2019] |
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How to Teach Your Children Age-Appropriate Financial Lessons
When it comes to understanding money management, responsible spending
and healthy saving habits, it's best to start young.
"For better or worse, parents serve as the prime example when it comes
to financial behaviors," says Michael Sullivan, a personal financial
consultant with Take Charge America, a national
nonprofit credit counseling and debt management agency. "Beginning
financial discussions early-on, and continuing these conversations
through each age, can help kids become financially independent and
confident come adulthood."
Sullivan outlined age-appropriate financial lessons that parents can
instill in daily life.
Ages 2-5
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Basic money knowledge - Teach toddlers the names of individual
coins and the value of paper bills. Explain how cash is deposited into
a bank for safekeeping.
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Saving up - Set up a piggy bank for kids to start saving on
their own and talk to them about the responsibility of keeping money
safe.
Ages 5-8
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Help at checkout - Allow little ones to help at checkout,
letting them purchase small items or counting cash with guidance. This
helps them understand that money is exchanged for goods - and that
items in a store must be bought.
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Spend/save/share - Upgrade the piggy bank to three separate
funds for kids to divide their money: spend, save and share. This
teaches kids how to allot money t daily expenses, work toward bigger
purchases and share with others.
Ages 9-12
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Odd jobs - Parents may encourage children at these ages to
start making and saving their own money through odd jobs, chores
around the house or an allowance.
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Comparing prices - Discuss how to find the best price. Ask
pre-teens why they think certain products might cost more than others.
It might be helpful to talk about situations where a more expensive
price is warranted or if a bargain price is better suited.
Ages 13-16
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Credit cards and more - This is a good age to introduce credit
cards, the importance of building and maintaining credit, paying bills
and other associated responsibilities.
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Gaining independence - Teens will probably show more interest
in having a regular income as they age. Whether they're saving up for
a car or otherwise, a first job is an opportunity to learn important
life skills, including depositing paychecks, paying taxes or opening a
savings account.
Ages 17+
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Higher education - Take the time to discuss college with young
adults. If higher education is in their future, ask where they'd like
to attend, their desired area of study, how they plan to pay for it
and their expected starting salary in their chosen field.
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Loans and interest - College is frequently associated with
student loans. Explain how "buy now, pay later" can result in
accumulating interest. Stress the importance of reading the fine print
and paying off debt consistently.
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Feeling secure - College or no college, help outline a
long-term financial roadmap to support them on their journey to
independence. Discuss where they see themselves in five years and
explore how to realistically and financially get there.
Take Charge America offers parents and teachers free financial
resources and elementary school lesson plans to guide such
conversations.
About Take Charge America, Inc.
Founded in 1987, Take Charge America, Inc. is a nonprofit agency
offering financial education and counseling services including credit
counseling, debt management, student loan counseling, housing counseling
and bankruptcy counseling. It has helped more than 1.6 million consumers
nationwide manage their personal finances and debts. To learn more,
visit www.takechargeamerica.org
or call (888) 822-9193.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190403005692/en/
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