I was frustrated when I read a headline that proclaimed that money habits are set in a child by the age of seven.  The actual study published by Cambridge University concluded that money habits can be shaped in children starting as early as age 4 as kids have the developmental abilities to learn good money habits. And by the age of seven, some core money behavior has been established.

Sowing the seeds

The good news is: our children are developmentally capable of learning smart money habits much earlier than we thought. So try the following ideas to take advantage of this early learning opportunity and start money lessons with your kids this summer:

  • Teach choice. Introduce the four choices for money (Save, Spend, Donate and Invest) to your child using a divided bank or jars. Teach them that there is more to do with money than just spend.

  • Set goals. Teach your child to set goals for each money choice. Kids need to know what they are saving for to maintain their interest. Goals help them delay the gratification of spending right now.

  • Success breeds success. Once a goal is realized, set another one. Help your child more quickly reach the goals they set. Match savings. Create opportunities for them to earn money. Talk about their goals with them at least twice a week. Show them how it is done and set a goal or two for yourself. Kids do what we do, so model the behavior you want to see in your child.

  • Make a list. Show them how to make a list of what they want and need. This list will be the lesson that helps them to begin to understand the difference between wants and needs.

  • Read about money. Books are great conversation starters. And, the more you talk about money with your child, the more they will learn. A recommended reading list of children’s books on money can be found at msgen.com to help you get started.

Lessons in lemonade

It’s summertime, so lemonade stands abound. This summer, make sure your child understands the cost of a lemonade stand as well as the power to earn money. A friend of mine told me about a kids-only garage sale they organized and how the organizing mom kept track of the cost of the posters to advertise, and the materials to label items for sale and required each child that participated to kick-in towards the expenses.

Net message: we have more quality time than we think to reach and teach our kids about money. The early learning time we do have comes at a moment in our child’s life when they are still listening to us. So start now to give them the chance to learn good money habits with you. For more money saving tips for your children, visit http://www.susanbeacham.com.