If you have children (or grandchildren) you have an opportunity to give them a jump-start on their journey to becoming financially responsible adults. While teaching your child about money and finances is easier when you start early, it’s never too late to impart your wisdom. Below are some age-relevant suggestions to help develop a financially savvy young adult:

• Preschool – Start by using bills and coins to teach them what the value of each is worth. Even if you don’t get into the exact values, explain that a quarter is worth more than a dime and a dollar is worth more than a quarter. From there, explain that buying things at the store comes down to a choice based on how much money you have (you can’t buy every toy you see!). You can also get them a piggy bank to start saving coins and small bills.
• Grade school – Consider starting an allowance and developing a simple spending plan. Teach them how to read price tags and do comparison shopping. Open a savings account to replace the piggy bank and teach them about interest and the importance of regular saving. Have them participate in family financial discussions about major purchases, vacations and other simple money decisions.
• Middle school – Start connecting work with earning money. Start simple with babysitting, mowing lawns or walking dogs. Open a checking account and transition the simple spending plan into a budget to save funds to make larger purchases. If you have not already done so, now is a good time to introduce the importance of donating money to church or charity.
• High school – Explain the job application and interview process. Work with them to get a part-time job to start building work experience. Add additional expense responsibility by transferring direct responsibility for things like gas, lunches and expenses for going out with friends. Introduce investing by explaining stocks, mutual funds, CDs and IRAs. Talk about financial mistakes and how to deal with them when they happen – this is typically more impactful by sharing your own experiences. If college is the goal after high school, include them in the financial planning decisions.
• College – Teach them about borrowing money and all its future implications. Explain how credit cards can be a good companion to a budget, but discuss the dangers of mismanagement or not paying the bill in full each month. Talk about the importance of their credit score and how it affects future plans like buying a house. Finally, make sure they’re aware of retirement savings and the importance of building their retirement account.

Knowing about money – how to earn it, use it, invest it and share it – is a valuable life skill. Simply talking with your children about its importance is often not enough. Find simple, age-specific ways to build their financial IQ because a financially savvy child will hopefully lead to a financially wise adult. If you have any questions about raising a financially savvy child, please contact your trusted advisor at Cray Kaiser.