It’s surprising that our schools don’t teach children about money despite the fact that financial skills is very important when it comes to navigating life. As parents you need to take up this challenge to teach your child(ren) important financial lessons.

I will use this post and a few others to give some tips for different age groups.

Ages 3-5
The Lesson: You may have to wait to buy something you want.

“This is a hard concept for people to learn of all ages,” says Kobliner. However, the ability to delay gratification can also predict how successful one will be as a grown-up. Kids at this age need to learn that if they really want something, they should wait and save to buy it.

Money lessons at this age set the tone for later on. “You really can’t start too early,” says Kobliner. Speaking of her own family, she says, “When we go into a store, if I say, ‘We don’t have money for this,’ they’re smart — they know we have credit cards,” So, she would say, “We’re here to buy a gift for X, and we’re not going to buy anything for you, because we’re not here for that.” Kids then quickly learn that going into a store doesn’t always mean you’ll buy something.

I had this experience yesterday when I went shopping for my first son’s birthday. His brother (a 4 year old) kept insisting he wanted somethings too and I had to make him understand that the purchases was about his older brother and that we won’t buy anything on impulse. He eventually had to adhere to that when he discovered I wasn’t going to bulge. I could have easily bought What he wanted but I wanted him to understand the concept of delayed gratification. This skill will be very useful much later in life too. The inability for many adults to save is because they find it difficult to say no to themselves. It is an art that is to be learnt. You will sometimes have to wait to get what you want.

Ages 6-10
The Lesson: You need to make choices about how to spend money.

At this age, it’s important to explain to your child, “Money is finite and it’s important to make wise choices, because once you spend the money you have, you don’t have more to spend,” Kobliner says. While at this age, you should also keep up with activities like the saving, spending and sharing jars, and goal-setting, you should also begin to engage your child in more adult financial decision-making.

It is interesting to note that once you get to explain this to your child you will see them use the concept of opportunity cost over and over again. Your child will rarely buy things without thinking. They will tend to always ask themselves “Do I really want to loose this money because of this?”

Adapted from: http://www.forbes.com/sites/laurashin/2013/10/15/the-5-most-important-money-lessons-to-teach-your-kids/