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Piggy bank for kids and finances or money

Why You Should Talk to Your Kids About Finances

set them up for success later in life

It’s easy to lump certain subjects into different categories when it comes to kids. There are things you talk to them about when they’re little, things you talk to them about when the issue arises and things you will talk to them about when they’re older. Financial matters and money tend to fall in that final category–if it’s really an area you discuss at all.

That’s because money topics can be difficult even for adults to understand—so how much harder would they be for the kiddos to grasp? But it turns out that’s not necessarily the case. We spoke with Julie Lambert, vice president and branch manager of Charles Schwab, about why you should talk to your kids about finances and when.

Why is it important to talk to kids about finances and money? Learning how to manage money and handle credit, as well as the importance of saving and investing, is empowering from a young age. The sooner that kids and young adults learn good financial habits, the better they will be set up for long-term financial success.

At what age should parents start introducing money concepts? Start conversations about money as early as possible, but tailor it around what your child can understand. That might mean teaching a young child about saving with the help of a weekly allowance, or talking to a teenager about investing basics.

Even young kids can understand the idea of setting goals and saving to reach them, and they’ll enjoy seeing their money add up. Plus, the earlier kids start developing good habits, the more likely they are to achieve financial independence later in life.

What topics should parents cover with their kids? Does it depend on their age or personality? It’s important to introduce kids to financial concepts like saving for a goal, sticking to a budget and investing for the future through activities that interest them. If you have more than one child, you know that no two kids are alike, nor are their thoughts about money. But while every kid is different, remember to talk to girls and boys in the same way and set allowances equally, as lessons about spending, saving, borrowing and investing are universal.

What are some ways parents can incorporate money topics in everyday life? This can be as simple as taking your kids to the bank to open a savings account or involving them in household budgeting conversations during a trip to the store or planning for a family vacation. It’s important to share lessons and what you learned from your experiences with money management, with the depth of that conversation being up to your individual family.

Do you have any games or activities you recommend that help teach good money habits? Learning about money can be fun and rewarding for kids. A few activities that can help promote good money habits include picking out a piggy bank or decorating jars where they can stash loose change, or for teens, creating a spending tracker to help them make and stick to a monthly budget.

Have you tried any games or activities with your kids to teach them about good money habits? If so, tell us at editorial@dfwchild.com.

Image courtesy of iStock.