Teaching kids good financial skills from an early age is critical for their personal development. Poor money skills can mess them up financially, while good money habits can insulate them from financial challenges as adults.

Unfortunately, not all parents consciously try to foster money skills in their kids. In fact, about 20% of parents, or nearly one in five, had never spoken with their kids between the ages of four and 18 about money basics. Even if they have, they aren’t raising awareness about these money matters at all.

There are a number of basic financial lessons kids should learn, and here are a few to get you started:
 

Money is Earned, Not Given

Children should understand that money is not an unlimited resource and that it's earned through work. Parents can instill this understanding by setting up chores or tasks in exchange for an allowance. By working for their money, children learn its value, independence, and resourcefulness.
 

Delayed Gratification and Needs vs. Wants

Teaching children the importance of waiting for what they want and discerning between needs and wants helps them develop good financial habits. Impulse buying should be discouraged, and children should learn the satisfaction of saving up for something they desire instead of immediately spending their money.
 

Saving is Essential
 

Introducing children to the concept of saving and showing them how to set goals and work towards them is crucial. Parents can help their children open savings accounts or introduce them to savings vehicles that earn interest. This not only teaches children about saving but also introduces them to basic math and the concept of compound interest.

By instilling these lessons early on, parents can help their children develop sound financial habits that will serve them well into adulthood. Since financial habits are formed at a young age, it's essential for parents to take an active role in teaching their children about money management.