What's the best approach for parents when it comes to teaching kids about money? Experts say that as with any habits, introducing and instilling this early on will help children develop a healthy mindset about finances.
Financial expert and book author Beth Kobliner told Business Insider that children begin to absorb money habits from their parents at around 7-years-old. Some parents, however, make a big mistake in teaching kids about money when they show their own fears and stresses about handling finances, especially if they are currently experiencing a financial crisis.
"I think that it is simpler than people think, but you don't want to express all that fear," Kobliner said. She stressed it's good to be honest to children about money matters but also suggested to thread this line carefully or consider the child's age when discussing the family's finances. The younger ones are better off not burdened by such details.
Ideally, parents need to guide their children about saving versus spending first. Do away with piggy banks in favor of clear jars — for spending money, for saving money and for donating or giving money away to charity, according to L.A. Parent. Use these jars to guide the children on how to equally distribute their allowance.
Accountant Robin Taub said parents can eventually introduce online banking and debit cards once the children are a bit older. At this age, they will be able to grasp the concept of handling money transfers and bank fees, according to CBC.
As far as making payments is concerned, parents must also set a firm schedule for paying bills and orient the children on the importance of becoming a good and responsible payer. This way, their kids can follow their example and pick up the same habits when they are older and handle their own bill payments.
