It’s not unusual for children to focus on the next new toy that they want without understanding how to get it. Beyond just spending money, children will need to learn where money comes from and where it can go. Financial literacy can make a tremendous impact on a person’s life, so why not start at a young age?
In this video from Prudential, children learn four ways to interact with money: earn, save, spend and donate.
There are many valuable lessons highlighted in this video. One idea is that it’s important to know everyone has different wants and needs. It’s okay to spend money once you have saved, and it’s also okay to donate. Knowing you have choices and the benefits of being responsible will go a long way to a lifelong, healthy relationship with money.
Introducing the concept of earn, save, spend and donate is a great way to begin talking about money and the opportunities around it. Beyond any lesson, your children will follow your financial example. Make sure that you and your family are all making smart choices about money.
Participate in this month’s poll: What is your budget for the holiday season?