Financial Literacy for Kids:  Effective Ways to Build Good Money Habits

Financial literacy means having the skills and knowledge to manage money effectively.  It involves topics that can be hard to understand, even for adults.

That's why it's important to begin educating children on money at a young age.

Parents know financial literacy for kids is critical.  But how do you start building good money habits from a young age?

Here are several ways you can start building good money habits in your children while they are young.

Model good money habits.  Children constantly observe and learn from their surroundings, helping them absorb the information.  

Teach them how to save money.  Saving money is a basic skill kids can learn at a young age.    

Go shopping together.  Teach them how to spend less on the things you need to buy.     

Encourage delayed gratification to help them learn to make intentional money decisions and avoid impulse spending.     

Explain how retirement works.  An ideal time would be when they get their first part-time job and can start investing in an IRA.     

Teach them how to avoid debt.  Explain how credit cards and loans work, emphasize the importance of paying balances in full, and discuss how some debt may be unavoidable.     

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