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.
Financial literacy means having the knowledge and skills to manage your money successfully and confidently. Broadly, that means knowing how to:
- 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
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.
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.