I don’t know if you’ve looked at what kids are learning about money in school these days, but it’s pretty bleak. If you want your kids to be successful in managing their money, it’s time to start looking at ways to teach money lessons at home.
From the UK, we have news that more than a quarter of teens didn’t know that it would be better to opt for a lower APR than a higher one when taking out a credit card or a loan. That same study revealed that a significant number of teens didn’t recognize a positive balance as a “good thing” on a sample bank statement. When should we start arming them with the skills they will need to navigate the world of finance? “It could be much earlier than many of us think,” quoth the WalesOnline author.
How early is too early? Simple answer: it’s never too early. Even at age two or three, you can start teaching your kids how to save for later using Goldfish or Teddy Grahams. (We advise starting with this very exercise in our book.) According to a recent Canadian study, kids as young as four years old can
- understand that people have a limited amount of money to spend
- use money to buy basic goods and services for simple transactions
- divide allowances or other money received among the financial goals of saving, spending and sharing
- understand that there are choices when it comes to money, and that money spent on one thing means that there is less money available for something else.
There’s a catch, however: they’re not born with these abilities. They must be taught. And they’re not learning them in kindergarten. It’s up to you – the parents – to start teaching money lessons to them at home.
I’ll close with a heartwarming story of one family’s quest to teach their kids about money management at home.
Getting your kids to think about money and finances is always a great idea, and the start of the school year may be the perfect time to begin. Most of our kids aren’t going to get a year-round lesson on finance at school. So a Montrose couple wanted to be sure their kids learn the value of a dollar.
He is known in his Montrose neighborhood as Garbage Man Joe. “We take it in and take it out,” Joe Jarvis said. Every single week, the 6-year-old pulls out garbage cans for his neighbors.
“Too many kids sit on the couch and don’t do anything, and this is an opportunity for him to be involved a little bit so I think this is excellent,” neighbor Fred Sedgwick said. “I take all cash and quarters,” Joe said. It’s a quarter for every can. Rain or shine, every week, Joe does the job for eight of his neighbors. “It takes me five minutes to do the job,” he said.