Why Kids Should Learn to Save as Early as Possible
Although preparing young people for a secure financial future is crucial, research has indicated that teenagers in the U.S. are woefully uninformed when it comes to saving and investing. If you have children, it may surprise you to know that kids as young as five years old have the ability to start learning about saving and investing their money.
Here are just a few reasons why it’s crucial to teach your kids about saving and investing as early as possible:
Kids are Developmentally Capable of Learning
A number of studies have indicated that most young children are developmentally capable of learning to save money – even if it’s in a physical piggy bank at home to start off with. Teaching them early will not only provide them with a hands-on mindset about saving part of the money they receive; it could also help them acquire a taste for financial planning that will remain with them into adulthood.
It will Teach them about the Value of Money
In today’s society, physical cash is being exchanged less and less – making it more challenging than ever to educate children about spending and saving. As such, it’s imperative for you to include even your youngest child in the household budgeting process because it will help them develop a basic understanding of how money-related transactions work when using debit or credit cards and online banking channels.
They can Learn about Delayed Gratification
Another reason why it’s crucial to teach young children about how money works is that it will help them to understand the concept of delayed gratification – which will go a long way in helping to ensure that they remain free from consumer debt as adults.
Studies were performed with young children that involved offering them one piece of candy or one toy right away or two pieces of candy and additional toys if they would be willing to wait for a short while. Most of the children involved in the study opted to wait so that they could receive a better return – meaning that they fully understood the concept of not being able to have everything they wanted right away.
Set them Up for a Secure Financial Future
Educating your children about saving from a young age will also help set them up to enjoy a solid financial future – without the need to move back home due to money-related difficulties. Teaching them the concept of ‘spend, save, share’ will not only introduce a healthy attitude to any amounts of money they receive; educating them about sharing or donating to charity will in turn help raise children to become socially aware adults as well.
One of the best ways to help teach your kids about money is to have them open their own bank account as soon as they start receiving an allowance and/or financial gifts from friends and family. If you would like additional advice regarding financial education for children, get in touch with our team today.