The battle for financial literacy rages on as educators and parents, politicians and lobbyists constantly engage in conversations over who should be teaching youth about money, and at what age these instructions should begin.
Reliance on public education, however good the intentions of teachers may be, is not enough. Education needs to begin at home and be reinforced at home. No lasting damage will come from kids hearing common financial sense at home and in the classroom. While the techniques and strategies may differ, the basics are universal. Budgeting comes down to spending no more money than comes in. Basic savings boils down to having a long-term goal and taking steps to meet that goal. Investing is simplified to setting something aside and letting it reap rewards for you through careful (in)action and decision making.
Political cacophony aside, take responsibility of your own children and do your part to help place them on a path that will inevitably lead to financial independence.
Whether your child is three or 13, you can instill within them a respect for financing and a deeper understanding of monetary consequences.
Not everyone will follow the same strategy in teaching their kids how to make financially savvy decisions, however, there are trends used by parents that can be adopted as a starting place for new parents looking for pointers on how to start the conversation.
Allowances are frequent vehicles used to teach basic money management, but they are not universally used, nor are they necessary lesson plan elements.
Similarly, some parents chose to teach their children through very hands' on interactions, having their kids open their own savings accounts, making physical banking transactions and matching whatever their children put into savings. Others have a more open approach toward their children's money and rely more on conversations and hypotheticals. There is no right or wrong way. The important thing is to bridge the gap between your vast knowledge and their blank slate.
Below is one example of how to talk to kids at various ages about money. It is by no means the only method, but it can help steer you in the right direction, knowing at what stage of your child's cognitive development they are in and what financial lessons are age-appropriate.
Take an interest in your children's future. Talk to them about money and the importance of smart management. Don't underestimate the influence your actions, inactions and words have on these young minds.
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