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How to Start a Conversation With Your Kids about Money

October 18, 2021

Financial topics and activities to teach your kids about money and build a solid financial literacy foundation.

I wish I was taught how to pay bills and taxes on time when I was young.

Has this thought ever crossed your mind? Or the regret that your parents never taught you the basics of budgeting, saving, credit cards and advanced topics like investing, mortgages, tax management, salary negotiation, and calculating retirement savings? 


As you are reading this, we believe you understand the importance of teaching your child about money from a young age. 


Your children watch you. It isn't just kindness and empathy that leave an effect on them. They also see, for better or worse, how you manage your finances.


Still, money is a topic that is frequently not taught early enough – or thoroughly enough – and leads to future generations dealing with financial illiteracy.

There could be different reasons for this: 


  • Parents think it's too difficult to make the topic engaging. 
  • It feels taboo. 
  • The parent doesn't feel they understand the topic sufficiently to teach their child about it. 
  • The parent doesn't feel their finances are in order enough to give lessons. 


It is important to have the correct conversations with your children about money.

If you're wondering when to start teaching, there isn't a set age; but, the sooner you start talking about money with them, the more likely they are to adopt good financial habits later in life.


Here are some financial topics and activities, divided by ages, to help your children develop a financial literacy foundation:


How to teach your kids about money from ages 3 to 7 


  • Everything about Coins: Spend some time counting money with your child. Help them grasp the meaning of different coins and rupee amounts. Teach them the value of each and how to apply coins in basic math.


  • Feed the piggy bank: Make finding loose change a game. Begin giving an allowance. Having a bank on the shelf that slowly builds up can demonstrate how they can save money.


  • Needs & Desires : Make saying "No" a part of a wider picture. Make the difference between a need and a desire a topic of conversation when your child is upset because you denied them something they want. You’re not telling your kid ‘No’ because you want to see them upset, you’re telling your kid ‘No’ because it’s simply a desire, not a need.


  • Adopt and care for a plant: Put your child in charge of a piece of the garden or a houseplant. Taking care of something on a daily basis might help kids comprehend what happens when you take care of something over time, such as saving and investing habits.


How to teach your kids about money from ages 7 to 11


  • Build art out of their desires: Have your child draw, paint, or make a collage that depicts the objects they want to buy. Encourage them to begin saving for a specific thing in the artwork that they can strive toward. Planting the seed of delayed satisfaction is the lesson here. Demonstrate to them that while it's tempting to buy what you want on the spur of the moment, receiving something you actually want after working for it is much better.


  • Make supermarket trips fun: Give your youngster a budget and challenge them to go to the supermarket and buy a list of necessities. Ask them to figure out how to buy everything on your list each week while staying within your budget.


  • Play simulation games with them: Sims, Life and Monopoly are examples of simulation games that might push them to make difficult financial decisions in a low-stakes scenario.


How to teach your kids about money from ages 11 to 13


  • Take them to the bank: Consider opening a savings account for your child with your financial institution. Many banks offer children's beginning accounts in your name, allowing you to keep track of them. There are also virtual bank services out there designed to teach children about money management. Work with your children to teach them how to handle their accounts on a daily basis.


  • The magic of compound interest: If you have a savings account or any other account that earns compound interest, show your child how you earn the money and why you choose to put it in the account. What made you open it? What are your plans for that money? Show them the maths which indicates how much money you can expect to make if you pay out. Work with your children to teach them how to handle their accounts on a daily basis.


  • Credit cards are not cash: Many credit card companies begin allowing children as young as 13 to become authorised users of credit cards. If you haven't already, now is the time to teach your child the fundamentals of credit cards. Why do individuals choose to pay using credit cards rather than cash? When is it right to use a credit card? If you enrol your child as an authorised user on your own card, make sure to reinforce these teachings by enforcing the rules you've established with them.


Teaching your children how to save money may appear to be difficult at first. However, if you try out these activities, you can make your child's understanding of money enjoyable and approachable.

It's a wise investment in information that pays out handsomely. Build a solid foundation for their future.

Remember, whatever method you use to talk to your child about money, the most important thing is to start the conversation.


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