We live in a material world. This means one of the most important functions of parenting is to teach children how to handle money. According to a 2013 Cambridge University study, kids understand basic money concepts at age three, and money habits are already set by age seven.
Jim Brown is a financial consultant and the founder of Jim Brown Investing. With two young children of his own, he’s developed six simple steps for teaching financial responsibility.
1. We play “Let’s Go Shopping” — He’s discovered kids are more engaged if you make it a game.
2. We play “How Much Does It Cost?” — Kind of like “The Price is Right” but with everyday items.
3. We don’t freely give them money — No unlimited funds for non-essentials.
4. We guide them through the budgeting process — The easiest way to budget is as a family.
5. We show them how to put their money to work — From piggy bank to local bank, a very important connection because earning through interest is an abstract concept.
6. We encourage them to do good with their money — It feels good to give to charity and discourages selfishness and greed.
For the details, read “I’ve been in finance for 30 years—and this is how I teach my kids about money” by Jim Brown (https://www.cnbc.com/2019/07/19/how-this-finance-expert-teaches-his-kids-about-money.html?).