Parents who help their children understand and use money wisely can also put them on the path to adult financial security. As children grow into adults, having basic savings to meet expenses like a first apartment or college education will make the unpredictability — and the expenses that come with it — of life a little easier to manage.
But a 2016 study by T. Rowe Price reveals that many parents miss opportunities in everyday interactions to help their children learn financial skills. Making a few small changes to parenting habits can help more than you think. GoHenry has compiled a list of 10 financial skills for kids to learn about earning, saving and spending money.
Often money lessons can be incorporated into daily activities. For example, talking about which item on the shelf offers the best value turns grocery shopping into a lesson in price comparisons. Or, showing children how they can divide allowance money between saving and spending illustrates basic budgeting. These early discussions shape their financial mindset as they grow. As young adults, from their earliest experiences of allocating funds between saving and spending, they understand the benefits of having a portion of their salary automatically deposited into savings.
Read on to learn tips and examples to help your child develop skills for better money management later in life.