According to Stuart Ritter, a certified financial planner with T. Rowe Price, children as young as 8 years old have already begun to form ideas about spending and saving money modeled mostly on their parent's financial habits.
"Kids are already learning about money at that age. They're watching what parents are doing and they're drawing their own conclusions," Ritter told 9NEWS. "Parents need to be sharing with their kids the context around what's going on."
However, those discussions can be difficult for some parents to start. That's why T. Rowe Price has developed a new website for adults, FamilyFinancialHub.com, with tips to help parents start teaching children about money management.
The site also includes a link to a new online game developed by T. Rowe Price in conjunction with Disney. The game, called The Great Piggy Bank Adventure, gives kids an opportunity to make decisions about how to use virtual cash and gives parents a chance to show their kids the impact of their choices, all within the safety of a game.
"We've created a fun, interactive, engaging adventure for kids to go through that teaches them not only some fundamental financial concepts, but also makes it easier for parents to talk to their kids, because the children have played the game and they've gotten exposure to some of these concepts," Ritter told 9NEWS.
Ritter says everyday situations that arise during the holiday season can also provide opportunities for parents to teach their kids important financial lessons.
"One of the most important things about managing money is setting financial goals. So, one of the things parents can do with their kids is sit down and do something as simple as drawing up a list of who we're going to be giving gifts to and how much money we might assign to each person," Ritter said.
He emphasized it's also important for parents to put holiday spending in a larger context.
"Something else parents can do that is extremely helpful is to help put those holidays in the context of the family budget. We're not just spending money on the holidays. There are other family goals that we're going to have after the holidays pass, like maybe a vacation next year or still saving for the children's college educations. So, telling your kids about the goals that you have set as a family, and helping them set their own goals, reinforces how important that is and helps them develop the skills [of] prioritizing and trading-off," Ritter said.
For more tips and strategies for talking to kids about managing finances, visit FamilyFinancialHub.com.
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