Kids need money to learn a valuable life skill—managing money. Not only is managing money a life skill, it is a life-long learning experience.
Money is of critical importance to the ordinary operation of one’s life or the world at large.
~ The Free Dictionary
In other words, money makes the world go around. Kids want money. They need money; they want to be like adults. Having money and making wise decisions is a skill that is not developed overnight. Kids need money early.
A three-year old can manage money
A Purdue University study found that kids can begin to understand basic money concepts as early as 3 years old. It’s never too early to start with the basics of money — and according to the latest science, ages 3-7 is the prime time for introducing children to money basics.
Even pre-schoolers are ready to manage their own money. A 3 year old who starts a no-cash allowance account will have 15 years of hands-on money management experience before graduating from high school. Kids need money before they start school.
Sometimes parents wait until their kids are in their teens before they start talking about managing money–when they could be starting when their kids are in preschool ~ Warren Buffett
Kids need money to develop this skill
What skill? It’s the skill of decision-making, same skill required to learn any other childhood endeavor. As parents we arrange for lessons for our kids, provide necessary equipment, expect them to be responsible, and be in control. We celebrate their success and encourage them along the way.
Money management is a skill they will take with them when they leave home. Making responsible financial choices improves one’s well-being over the years. Because everyone does not have unlimited supply of money, good decisions make the most of every dollar.
Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment it insures the possibility of satisfying a new desire when it arises.
~ Aristotle
To learn this essential life skill, kids need money. Only parents can provide the necessary money with the responsibility and the control to manage it all by themselves.
When parents provide other lessons for their kids they do not make real-time decisions about how to use the bat, the ball, the musical instrument. If kids do not have complete control while learning a skill they will not master the necessary decision-making to become proficient.
Parents are the first (and best) teachers
The use of money is all the advantage there is in having it.
~ Benjamin Franklin
Parents are the best teachers to help their kids learn this essential life skill because only parents can:
- Provide money
- Provide opportunity for practice and repetition
- Encourage and praise
- Commiserate over mistakes
- Trust their kids to make good decisions
- Provide years of practice before adulthood
- Start the conversation money
As a parent you use money you would spend on your kids anyway to provide a financial education in your home to give them real control of real money now. No allowance apps required.
When your kids manage all their money as a number, they become better money managers.
Anecdote: When I handed my 5-year-old her first allowance her 3-year-old sister wanted hers. I thought she was too young to understand the concept of money so told her that she had to count to one hundred. The next day she surprised me and did. My kids grew up to teach me a lot about allowances.
Lynne Finch helps parents teach their kids about money from their first allowance to online banking. “It’s time to teach the kids how to manage money they can’t see or touch,” says the author of The No-Cash Allowance. Follow Lynne’s common sense approach for teaching children that money is a number with kids as young as pre-school and continuing through high school. Buy now
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