Having your preschooler wait a few minutes before getting their favorite snack is a good lesson in self-control. And it could lay the foundation for a solid financial future.
In a recent Consumer Financial Protection Bureau blog post, Laura Schlachtmeyer writes that helping young children develop self-control, planning and creative problem-solving skills can put them on track for a solid financial future, even though at first glance those skills may seem unrelated to finance.
So, what’s the connection between those basic skills and personal finance? Schlachtmeyer writes:
In the first five years of life, children go through rapid neurological growth and can quickly expand key abilities such as self-regulation and planning for the future. As your children grow older, they’ll need these skills and abilities (known in child development as executive function) when they make more complicated decisions about making plans or budgets.
This young mother’s description of her 3-year-old using executive function skills may help put the importance of these abilities in context:
“My son was very excited about celebrating his third birthday with a special treat with all his friends at day care. I asked him what kind of fruit he wanted to serve for his treat, and he enjoyed planning the menu of peaches and blackberries. We went to the grocery store together and got the fruit a couple of days in advance.
The next morning when I offered him a peach with his breakfast, he said, ‘No, Mama. We can’t eat that because it’s for my birthday party.’ He knew what the payoff of saving the peach would be, and how that fit into the plan for his party. And having the party just like he planned it was really motivating and important – that idea was more exciting than eating one of his favorite foods. I was really proud of him, and feel like this skill of planning for something he cares about, and sticking to the plan, will serve him well in life.”
Practicing self-restraint and delayed gratification at a young age could undoubtedly help your child make smart financial decisions later in life.
For tips on teaching your children about money, click here. It’s never too early to start building a strong financial foundation for your little ones.
“As a parent, you are the most powerful influence on your children’s financial lives,” writes Schlachtmeyer.
Check out “6 lessons That Turn Kids Into Money-Savvy Adults.”
My parents didn’t teach me anything about finances, so I was forced to play catch-up as an adult. My mom said that she didn’t think money was something children should have to worry about.
I don’t think kids should necessarily worry about money, but I do think they should be taught some basic financial skills. The two aren’t the same. I think one of the main reasons I struggled and made lots of money mistakes as a young adult is because I lacked the most basic financial foundation. I’m determined not to make the same mistakes as a parent.
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