Financial Literacy for Kids: 10 Effective Ways To Build Good Money Habits

As parents, we know that financial literacy for kids is critical. But how do we get started? Which topics should we teach, and when? In this post, I'll answer these questions by sharing ten ways to build good money habits in your kids.

What Is Financial Literacy?

Financial literacy means having the knowledge and skills to manage your money successfully and confidently. Broadly, that means knowing how to: -Save money - Invest - Avoid debt - Save and plan for retirement

Now that we've defined financial literacy, it's time to get into the tips. Here are ten ways you can start building good money habits in your kids today:

Financial Literacy for Kids: 10 Effective Ways To Build Good Money Habits

1. Model Good Money Habits

Children constantly observe and learn from people and the world around them. Therefore, one of the best ways to instill financial literacy in kids is to model good money habits.

But what does this mean? It means, first of all, smashing the taboo of talking about money. Instead, show your kids how you save, spend, invest, track, budget, and so on.

2. Teach Your Kids How To Save

One of the most basic money skills kids can learn is how to save money. For the youngest of kids, it works best to do this in a tangible, tactile way. A fun way to do that would be to pick out a piggy bank together, then deposit money they earn, find, or receive.

3. Teach Your Kids the Basics of Investing

Kids can start learning the basics of investing from a surprisingly young age. Here are some age-based ideas for how to instill investing knowledge: Basic Concepts (4–8 years old) - Point out public companies they're familiar with (e.g., Disney, Mattel, Apple). - – Explain how regular people can buy a tiny piece of those companies.

You can get them started with an investment account much earlier—perhaps as soon as they have some extra birthday or holiday money.

4. Help Your Kids Start Investing

One of the best ways to do that is to take them shopping with you. You can then weave in financial literacy lessons by showing them how you spend less on the things you need to buy. 

5. Go Shopping Together

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