Simple steps to help kids build smart money habits

According to a Forbes report, 44% of Americans have trouble coming up with $400 to cover an emergency expense, and a third of Americans have $0 saved for retirement? And inflation is only making matters worse. So, teaching your kids about being responsible with money is more important than ever. Craig Bolanos, the CEO and co-founder of Wealth Management Group offered simple steps to help kids build smart money habits.

Here are a few frequently asked questions and answers from Bolanos:

Question: What age should you start teaching your children about money?

Answer: A 2 or 3-year-old faced with a choice between a penny, dime, and nickel will almost always choose the nickel because of its size. But while very young children won't fully understand the value of money, they can begin to learn the names of coins. (Turn it into a coin identification game.) *Note: Toddlers may try to swallow coins, so always provide close supervision. Also, young kids love to play store. Set up an imaginary shop in the living room and exchange play money for goods. Your child can begin to understand the basics of commerce.

Question: What's your advice for pre-school age children? (Ages 4-5)

Answer: We can move into more advances concepts like using coupons. At 4-year-old or 5-year-old can help you sort coupons. When you're at the store, hand them the coupons and ask them to keep an eye out for the products. This will make them feel like they're helping, and it's an easy and fun way to talk about saving money.

Question: What concepts can be helpful for children entering elementary school? (Ages 6-8)

Answer: By the second or third grade, most kids have the math skills to start grasping concepts surrounding savings. Make a trip to the bank an event. Help your child open a savings account and encourage them to make regular deposits. As the balance grows, you can discuss the concept of interest and how the bank pays people back for saving their money. Many banks have children's accounts that offer no-fee and no-minimum-balance accounts.

Question: What do you suggest teaching middle school kids between 9-years-old and 12-years-old?

Answer: For this age Craig suggests having them be in charge of a project where they handle the money, like a yard sale. With some supervision, preteens can handle much of the responsibility while learning about setting value to items, making decisions, and helping you haggle with customers over prices.

Question: For high school students, is there any way to teach teenagers to be responsible with money??

Answer: If you're not serious about it, they won't be either. The early teen years are not too soon to learn about the stock market. You can "pretend" invest in companies your child is familiar with, like Disney or Mattel. Have a child pick a stock or two and then watch the financial news together and discuss how the stock values of their choices fluctuate. This is also the time to set a budget with their allowance money and set limits on how much of it they can spend and how much they need to save.

Question: For ages 16 and up, what are some tips to ensure they are making smart money habits?

Answer: To prepare them for being responsible with credit cards when they are old enough to qualify for them, get them a "stored-value" card (such as Visa Buxx).These are simple tools that parents can use to teach lessons in financial responsibility. Teenagers can use these buying cards to pay for things without using cash or credit cards. Parents load the cards, which look like credit cards, with a set amount of money and then let their teens budget their allowance on their own (with your monitoring, of course.)

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