are your Kids HItting These Financial Literacy Milestones?

Teach Financial Literacy to Your Kids

We know, we know…in a good year, most of us are totally overextended. We have work deadlines to meet, swim practices to coordinate, lunches to pack, violin recitals to cringe through and endless loads of laundry to put away. And that’s just on a regular Tuesday.

And yet, here we are telling you to add teaching financial literacy onto your already overloaded parental plate?! Are these finance ladies nuts?

The answer: probably, most definitely, yes. BUT we do know a few things about helping kids flex their financial muscles from the earliest age. We break it down by age and stage to help parents make sure they are checking the financial fitness boxes as their kiddos grow.

Age Appropriate Financial Literacy Milestones For Kids

Age 3 and up: Practice delayed gratification

Kids these days...they aren’t used to waiting. Patience, as a virtue, is barely practiced as devices distract, Amazon same-day delivers and Disney+ offers a telescopic library of animated history (commercial free!) at the tip of little fingertips. But patience, it turns out, is hugely important. Specifically, children’s ability to delay gratification is highly predictive of future success. Kids who learn how to forgo an immediate reward for the possibility of a more valuable reward in the future are practicing a skill that has life-long benefits.

We at Team BT get our children to practice delayed gratification by:

• Praising self-control in our household.

• Modeling patience for our kids.

• Using positive distractions to overcome impulsive actions.

• Making a long-term plan and executing it

In a few simple steps, we can help kids develop their willpower from the youngest age to build the foundation for future money moments. More on delayed gratification here.

Age 5 and up: Earn an allowance.

The easiest way to get kids on the spending, saving and giving bandwagon? One word: allowance. When used wisely, allowance may be the most powerful tool for financial literacy and teaching kids, both young and old, good money habits.

As team players pitching in around the house and reaping the rewards of their hard work, kids gain independence, confidence and competence. In making decisions on how to spend, tracking weekly savings, or taking ownership of opportunities to give, children are also quietly building the money-smart habits that will endure far into their futures. Most importantly, by making allowance a regular part of the family routine, parents are sparking a daily dialogue around money that is quite literally, priceless.

Age 8 and up: Investing and Entrepreneurship

Investing

When it comes to investing, time is money. The sooner kids get started, the more their money grows. Kids should know that investing is putting money to work in stocks, bonds, mutual funds and ETFs (among others!) in the hope of making more money. Kids should view investing as a long-term endeavor to help build a nest egg, or even generational wealth. But how do we get little kids in on the action?

Before taking a little leap into investing, parents can help kids create a mock portfolio of their favorite companies to pique their interest. When it comes to putting real money to work, Team BT focuses on traditional investing based on the fundamentals (we’ll save meme stocks for another day!). With innovative investing platforms like EarlyBird, kids can slowly build their nest egg through the power of time and compounding. Even better? Family and friends can make wealth not waste by seamlessly contributing to a child's investment account for any milestone moment.

Entrepreneurship

Some kids are born with business on the brain, while others need a little more encouragement to elicit their inner Elon Musk. Parents can take simple steps to help their kids strengthen their entrepreneurial skills and good money habits for a successful future, no matter what career path they choose to take.

First up! Parents can explain that an entrepreneur is a person who starts his/her own business, and in the process assumes the risks, responsibilities and rewards. (Henry Ford, Oprah Winfrey and Walt Disney are just some of the many well-known entrepreneurs who took great risks to build their businesses, and also changed the shape of American life in the process!) There are some young entrepreneurs out there who might inspire your littles too.

Parents can help their kids develop the entrepreneurial skills they need by encouraging problem solving, building resilience, helping kids turn a hobby into a business, starting a family venture, and talking about entrepreneurs they admire.

While helping kids build financial literacy might feel like a tall task, a little bit of mindfulness can help parents make the most of everyday moments with their littles and help them start good money habits. Even the most simple carpool conversations can kick start the money-smart habits kids need for the future, no tedious textbooks required.

Have you met these financial literacy milestones? What could you do to make your financial fitness even stronger?