Financial experts agree that it's good for kids to start learning about money at a young age, but how do you know when to start teaching your kids? There's some debate about that, but it always comes down to what's right for your child’s needs and abilities. If he's a natural Warren Buffet or she's the next Suze Orman, the lessons might begin early, and you can give them more sophisticated concepts sooner. But even if they don't show a lot of interest in money, don't worry—and don't force the topic. It's all about timing and consistency. Learning about money is a process, not an event, and there are five foundational issues you’ll want to cover in your child's financial education:
- Where money comes from. For many kids, this is the first step in learning about money, and it often takes the form of paying your child for age-appropriate chores around the house.
- What money is. Help your child learn the difference between a penny, nickel, dime and quarter and what each is worth, along with the major bills: $1, $5, $10 and $20.
- How to count money and make change. Play games with your children that involve "shopping" and what things cost. Help them count amounts as well as count the change when you have more than the amount.
- How to keep money safe. Talk about the importance of financial responsibility and carefully help your child face the consequences of being careless.
- What money is for. All those wonderful "things" kids can buy with their money are just part of the story. Talk to your young ones about how they can use money to make more money by earning interest. Consider teaching them about charitable giving, too.
These concepts help you establish a solid foundation for financial literacy, and while most kids should have them down by the time they’re 11 years old, it's never too late to learn good money habits.
Ally Bank Is Here to Help.
Learning about money often happens when your children observe you. Good money decisions—like choosing the convenience and consistently competitive interest rates of Ally Bank, for example—help solidify the other lessons you want them to learn.
Learn more by visiting Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.
Ally Bank, member FDIC