How soon is too soon to teach children about money?Sunday, October 17, 2021
As parents, you want the best for your children and that includes laying the foundation that they can build upon to do well in life. One lesson that often slips through the cracks is how to be smart with money, but when it comes to teaching children invaluable financial literacy skills, it is truly never too late — or too soon.
According to behavioural research from Cambridge University, children begin to grasp basic money concept by age three, and by age seven, many of their money habits are already set.
Consequently, there isn't a perfect age to introduce basic money concepts to children, but rather when they show early signs of being interested in money matters, and parents are confident of their knowledge retention.
Psychologist at Family Life Ministries Dr Beverley Goldson indicated that this is because children develop at different stages in life.
“…Psychologists say that at age seven children are more socialised and their cognitive skills are developed so that is a good age to begin, but there are some children, who although at the age of seven, are not that developed and so they're not able to do as what a particular seven-year-old do. In addition to that there may be a five-year-old who can do what a seven-year-old can do, and even surpass that,” she said during a recent episode of Victoria Mutual's Making Moves series.
“The Bible teaches that you should train up a child in the way he should go and when he is old he will not depart from it. So whatever age you think is best for your child, whatever age and stage you think the child is more capable of understanding these matters, then go ahead,” she continued.
She pointed out that while children learn from observation, they also do by direct teaching, and as a result parents should practice reinforcing positive money management.
“Although time is hard and they may not have much money, [parents] can teach their children about saving. What they can do is tell their children about mistakes that they may have made when they were growing up which caused them to be in the situation that they're in,” Goldson advised, adding that they don't have to be wealthy to discuss the functions of money.
According to Forbes Advisor learning to save isn't just an essential money habit, but it also teaches discipline and delayed gratification which fosters goal-setting and planning, and ultimately creates good financial habits.
While some may argue that children should not have to worry about money, educating children about money management at an early age will build their confidence, awareness and resilience around this critical aspect of life.
The sooner the discussion of the value of money, saving and spending wisely begins, the earlier children will develop critical skills to help them build good financial literacy.