Kids pick up money habits earlier than parents realize, expert says

(InvestigateTV) — Children begin picking up on money habits much earlier than most parents realize, according to Teresa Murray, a consumer watchdog with US PIRG.

“We may think sometimes that our children aren’t paying attention to us when they’re three or four years old — oh no, kids are smart, and they learn from us,” Murray said. “And some of that happens really early.”

Murray said a parent’s financial behavior often becomes a child’s first money lesson, whether intentional or not.

“If they see their parents making careless or irresponsible choices, then they will probably learn that behavior very quickly,” Murray said.

Murray recommends using real situations, like birthday money, to teach kids how to think ahead about spending.

“Say a kid got $100 total in birthday money from grandparents and aunts and uncles and stuff — go and sit down with the kid and say, ‘Hey, what are you going to do with that money?’” Murray said. “I mean, their eyes are going to glaze over the math, but you need to teach kids how to think ahead with their money.”

Murray said parents can also share their own financial priorities with children in simple, age-appropriate terms.

“It doesn’t even hurt to share that with the kids a little bit — like, don’t lay it on heavy, don’t depress them,” Murray said. “But it’s like, yeah, we were planning on getting new furniture for the deck, but gosh, our refrigerator broke, so now we have to wait. Model that kind of behavior, model that kind of language. Kids are smart. They’ll understand.”

Murray said building these habits early can give children a head start once they begin managing money on their own.

Beyond money habits, experts also recommend talking with children early about what personal information they share on tablets and smartphones — a conversation focused less on finances and more on safety.