When and how to teach children about money, as suggested by experts

Being financially secure and literate might be crucial to ensuring their future happiness and comfort, yet parents sometimes don't want to worry their children and want them to be carefree. However, experts advise parents to give their children financial confidence boosts.

“Being successful in life requires solid financial management since it affects significant life events like marriage, employment, and property ownership”. Said Susan Hirshman, director of wealth management at Schwab Wealth Advisory.

For instance, credit checks may be performed on applicants by employers. Your financial past might also have an influence on significant purchases like a home. Hirshman added that developing healthy habits early on can help prevent any problems.

Without financial education, children may also be at risk for debt traps like "buy now, pay later," among other risks.

When to introduce kids to financial literacy

It is obvious how crucial having a discussion about money is. But when exactly should you start having it? Although experts' predictions vary, it may happen much sooner than you expect.

According to Seth Wunder, children begin to understand certain financial ideas around the age of six.

He went on to say that by the time children are seven, many of their financial habits have already been established and that youngsters are aware of and interested in money far earlier than many parents may anticipate.

According to Eric Landolt, issues may be more challenging for children aged eight to twelve. "You can discuss the many forms or applications of money. Therefore, it might be constructing vs investing, or saving or spending”.

Between the ages of 12 and 15, as children start to become teens, they might be given additional responsibilities, such as overseeing a modest budget, according to Landolt. This covers ideas like spending, saving, and comprehending how choices made now might affect the amount of money left over later, but in greater detail, he said. At this age, you might also start talking about family-wide financial issues like sponsoring charitable endeavours or charities and soliciting the kids' thoughts on such, according to Landolt.

Consider this while discussing money with children

There are a few things experts advise remembering once you've decided to start talking to your kids about money.

The 3 most crucial things to keep in mind are to be consistent, concentrate on your actions, and have ongoing interactions.

You might allow them to make little errors that they can learn from.

Hirschman mentioned that providing kids with an allowance is one method to do this. Wunder supports this idea and argues that it may teach children to make appropriate financial decisions about their spending, saving, and borrowing.

Finally, as with many other things, Hirshman thinks that parents setting a good example for their children may have a significant influence. Parents should attempt to avoid sending opposing messages and should live out what they teach, she added. 

(Sources: cnbc.com, moneyhelper.org.uk)