Research shows that kids start developing financial habits as early as three years old. By age seven, these habits are mostly set. So, it's a critical window for parents to teach their kids about money. Yanely Espinal, the director of educational outreach at NextGen Personal Finance, says that parents can start teaching their kids about money from a young age, even as young as three or four years old. They can start with simple things like putting coins in a piggy bank. As kids get older, they can start doing more complex things like going grocery shopping or doing their own banking.
Yanely emphasizes the importance of creating new generational cycles where our parents didn't talk to us about money. She shares her own experience of growing up in a household where there was a lot of financial shame. Now, as an auntie, she makes it a point to talk to her nieces and nephews about money and lessons about saving and investing.
As kids get older, they need more hands-on and tactile experiences to learn about money. Yanely recommends games like the bean game, where kids can set up a budget with beans. They can also read books about money together and start talking about banks and saving. These are critical transition points in their financial education.
In middle school, vocabulary becomes a big part of financial literacy. Yanely suggests talking to kids about words like producer, consumer, business owner, and profit. They can watch episodes of Shark Tank together and learn about entrepreneurship. They can also learn about investing and how to make smart financial decisions.
High schoolers can learn about personal finance through online games and apps. They can also learn about budgeting and saving through hands-on experiences like planning an outing or creating a budget for a hypothetical business.
