Being a parent comes with a lot of responsibilities. One area parents have to look at is how they raise their children regarding finances. A toddler will not understand the concept of investing, but there are age-appropriate ways to help your child have a positive relationship with money.
One of the easiest ways to start talking about money with your children is to give them an allowance. You can decide if there are rules to when your child gets an allowance. For example, do they need to complete certain chores every week or have a certain grade in their class to get their allowance? Whatever your rule is, try to set up a good habit of dividing their money right away. For example, you can have three piggy banks for your child – save, spend, give – and have a rule that 1/3 of their money goes into each bucket. This will help them learn how to save money when they are older automatically, a skill many adults don’t have.
Another way to raise a financially literate child is through books and games. There are many age-appropriate books that your child can read, from picture books to chapter books. These can teach them additional information about money. Read the book along with your child so you can talk to them about the book and expand beyond their reading. Then, you can play board games like monopoly, Life, or Catan that use money or resources to advance in the game. They can see different strategies for saving or spending to see what the outcomes are.