Learning isn’t confined to a classroom. It happens throughout life. Environments, experiences, and relationships shape human behavior. We continuously learn by observing and interacting with people and other factors in our environment. The moment a child is born, they start to learn. Therefore, children get their cues from their parents as they model important life skills, including money management skills.

Money Management

Money management is a life skill children learn by examples and experiences. Most children learn money management behavior from parents. So, modeling good money habits is one of the best ways parents can help their children to develop good money habits.

In building age-appropriate behavior, keep in mind that children undergo various developmental stages as they grow. Knowing why and how children change as they age will help parents to align money-related activities and communication to a child’s particular stage of development.

The Consumer Financial Protection Bureau publishes an excellent resource that provides age-appropriate conversations and activities for parents. Remember to talk with your children about money and adjust the conversation to fit their age. For example, younger children should be shown coins and notes when explaining the concept of money. Because money is abstract to the child and money is increasingly becoming virtual, providing coins and notes makes money more tangible, or concrete, for children.

Be Authentic

Provide authentic learning opportunities for children of all ages to earn, spend, save, and donate money. Allow children to make financial decisions, even if their decisions are mistakes. The goal is for them to learn from their mistakes. Additionally, be deliberate in modeling positive financial behaviors. When setting good examples for children from toddlerhood to young adulthood, be aware of financial behaviors and make sure your behavior aligns with your words.

Conclusion

Teach children good money habits early, and remember they hear and observe what their parents do when it comes to managing finances. Be sure to provide real-life situations and activities for children to make learning meaningful. Lastly, don’t be afraid to include children in family financial discussions.