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11 Essential Money Management Skills To Teach Your Children at an Early Age

It’s essential to instill money management skills in children from a young age to promote their financial well-being. By starting this education early and establishing a strong groundwork for your child’s financial future, you’ll equip them with the necessary habits to make well-informed financial choices. With the lack of financial education in school, parents need to take the reigns and teach their kids money management skills so they’re better prepared later in life. 

The following tips will help your children develop a healthy relationship with money:

1. Be a role model

Surprise — they’re watching! Kids copy their parents’ financial behaviors, so lead by example through healthy financial habits, such as saving money, paying bills on time, and avoiding impulse spending.

2. Open a bank account

Show them how their bank account works, such as how to make deposits and track their balance. 

3. Teach through daily life activities

Use everyday situations to teach them about money. Take them grocery shopping with you and explain budgeting and comparison shopping to find the best deals. 

4. Set savings goals

Have them set a goal for an item or a trip they want to take. As they work towards reaching that goal, they learn the value of saving and mindful spending habits.

5. Encourage entrepreneurial thinking

Guide them through earning and managing the money they make from activities such as babysitting, mowing lawns, washing cars, and pet sitting. 

6. Make it fun

Using a piggy bank for saving and adding games and rewards to the mix helps keep learning about money interesting and enjoyable. 

7. Add educational resources

Make financial literacy engaging with books, games, apps, and websites that teach them money skills.

8. Give them an allowance

Educate them on how to track, save, and spend their money. Through earning an allowance, they learn how to make financial choices and the consequences of their spending decisions.

9. Involve them in financial decisions

If you’re buying a new car or planning a vacation, discuss your budget and the additional expenses involved, such as car insurance, plane tickets, and hotel rooms. 

10. Discuss borrowing money and managing debt

Teach them about borrowing money, handling debt responsibly, and the importance of credit scores. Explain need vs. want scenarios and how uncontrolled spending can lead to debt.

11. Prepare them for major life events

Discuss how money impacts their future in areas such as going to college, buying a home, and retiring. 

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