INFLATION! Rising costs. Stagnant wages. Are you feeling the pressure? Now, more than ever, budgeting and other financial skills are key. Do your young children have them? Are they ready for their financial future?
Research shows that kids who learn about financial literary at a young age are more likely to grow up with the financial skills necessary to plan for a happy future. Now, this doesn’t mean that your four-year-old should be buying stocks. But by introducing age-appropriate fiscal skills throughout childhood, you’re ensuring that by the time your kids are old enough to care about the Dow Jones, they’ll have learned how to save their money and make good choices when they spend it.
So what skills should kids have before they reach adulthood? Let’s work backwards. Right now, as an adult, you probably know how lines of credit, mortgages, and investments work. But how did you get to this point?
Maybe you got a credit card as a teenager—at that age, it’s important to understand how credit cards offer you a chance to buy something and pay later. But remember, if you spend beyond your means, you’ll risk having to pay interest. And not paying means bad credit for years to come! During the teen years, CREDIT and INTEREST are key. (Psst! This is also a good time to discuss saving for significantly bigger purchases, such as a car or, someday, a home.)
Going further back, you may have had an allowance as a kid. This taught you about SAVING money, and perhaps about EARNING it if you only got allowance in exchange for chores. But when you were seven years old, did you really know how to manage your finances and save up for something big? How can we teach kids these basic but crucial skills?
Enter Three Little Piggy Banks, a popular book by financial planner Pamela George. Young readers will learn about delayed gratification, the importance of sharing, how to set a goal for saving, and how good it feels to buy something special while living within one’s means.
Yes, we are in uncertain financial times. Give your child the gift of financial literacy. Give a young person you love the skills to face their financial future with confidence.
Knowledge is a powerful tool. Check out the Three Little Piggy Banks: https://www.dc-canada.ca/three-little-piggy-banks/
November is financial literacy month! Start talking about finances with your kids today.