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Teaching kids about money is something that can begin as early as pre-school. After all, money habits form in children by the time they are 7 years old, mostly by observing you. Those little eyes are always watching!

A budget is a great place to start. Create a game by taking your child to the grocery store with $100 to spend and a food list for the week. Let them help you add the cost of the groceries and determine how to cut back where appropriate. This will teach them that money doesn’t always cover every want. It can also demonstrate ways to save such as purchasing generic brands and using coupons when available.

Another strategy is to encourage your children to start saving money on a regular basis. When they receive money as a present or weekly allowance, they may immediately think of ways they can spend it. Introduce the “Save, Share, and Spend” model by labeling three jars. To start, you may instruct them to put 10% in the “Share” jar, and split the remaining 90% between the “Save” and “Spend” jars based on their goals. Help them create their own budget by determining what they would like to save for with the money in the “Save” jar. Each week you can review together how much they have saved to date and how much they need to accomplish their goal. 

Teach your children about the stock market and ways they can invest money. Is there a particular brand, store, or restaurant they enjoy? Start by purchasing a share or two and show them the daily fluctuations in the stock price. Let them see that while you may lose money at times, eventually most stocks increase in value.

Helping your kids learn the basics of finances at a younger age will instill financial values so they make smarter money decisions as adults.

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