Piggy Banks & Power Moves: financial planning for kids

Greetings, Parents!

In today’s world, where financial independence and security are more critical than ever, equipping ourselves and our children with the skills to make informed choices is essential. Let’s explore why financial decisions matter and how we can nurture financial literacy from an early age.

Financial Decisions: The Foundation of Success

Sound financial decisions are the building blocks of a prosperous future. From managing day-to-day expenses to planning long-term investments, these choices shape our lives significantly. Recognizing that making informed financial decisions is a skill that must be developed over time is key to financial success.

Bridging the Gap: Parents as Financial Educators

While the education system lays a strong foundation in many subjects, it often overlooks practical financial education. This is where you, as parents, step in. Teaching financial literacy at home is crucial, and parents play an instrumental role in helping children develop money management skills.

Starting Early: A Key to Lifelong Success

The journey toward financial literacy ideally begins at a young age. By introducing financial concepts early, children can develop a strong understanding of money and its value. Here’s a breakdown of key financial topics to address at different stages, based on insights from bestselling authors Loral Legermeier and Kyle Boeckman:

• Birth to Age 5: Teach basic concepts like the value of money, how to count it, and simple financial goal-setting.
• Ages 6-8: Introduce family financial goal-setting, explain how interest works, and differentiate between active and passive income.
• Ages 9-11: Encourage entrepreneurial thinking, discuss assets versus liabilities, good debt vs. bad debt, and risk vs. reward. Help them step out of their comfort zone for personal growth.
• Ages 12-15: Teach practical skills such as using checking accounts, debit cards, financial forecasting, and understanding credit. Explore options for purchasing a car.
• Ages 16-17: Help them start a real business, understand taxes, prepare for college, and navigate student loans. Introduce financial tracking tools.
• Age 18 and up: Stress the importance of finding mentors or coaches, responsibly guide them in obtaining a credit card, and explore real estate investments.

Don’t wait to instill these critical financial skills in your children—it’s never too early to start.

What steps have you taken so far?