If you are a parent who believes that money matters are only for adults and that children have no part in it, you are mistaken. If you want your child to succeed, one of the essential lessons you need to equip them with is about money.

         According to Beth Kobliner, a renowned author of the bestseller "Get a Financial Life," children begin to understand the concepts of saving and spending at the age of 3. This aligns with research from the University of Cambridge, which found that children's financial habits start to take shape and become evident by the age of 7.

Here are lessons about money that parents can teach their children at different ages:

 

Age 3-5: Teach Patience to Wait for Desired Items

 

         "The fundamental concept that needs to be instilled from a young age is patience. Believe it or not, the higher this wall of patience is built, the more it predicts future success. Instead of giving in when your child asks for something, or pretending you don't have money, you should change your approach by teaching them to wait or be patient to achieve what they desire."

         One simple technique parents can use is the 'Three Jar Theory.' Label each jar as Savings, Spending, and Sharing. Whenever your child receives money, have them divide it equally among the three jars and teach them what each jar is for. The spending jar can be used for small purchases, the sharing jar can be for donations or charity, and the savings jar can be for larger items they want to buy, which you determine is within their reach. Importantly, you can encourage them by helping calculate how long it will take to save enough to reach their goal.

 

Age 6-10: Start Using Money Wisely

         At this age, parents should teach their children the value of money and how to spend wisely by involving them in decision-making about money. For example, ask them to think and compare why they should buy item A over item B, and then allow them to make their own decisions on how to spend their money.

 

Age 11-13: Practice Long-Term Financial Planning

         At this stage, you should start teaching kids about long-term financial planning. Use examples to illustrate the concept, such as if they start saving 1,000 baht a year from age 14, by the time they are 65, they will have 230,000 baht. However, if they start saving 1,000 baht a year at age 35, they will only have 70,000 baht by age 65. Additionally, teach them to set bigger goals. While childhood savings goals may have been limited to buying toys, encourage them to aim higher for long-term financial planning.

 

Age 14-18: Equip Them with Investment Knowledge

         During their school years, not every child will have the opportunity to start a business. Therefore, to equip them with investment knowledge, start with analyzing and comparing tuition costs. This doesn't mean letting tuition fees extinguish their dreams, but rather viewing education as an investment. This involves calculating costs and assessing the family's financial readiness to support their education. At the very least, this prepares them to seek solutions or assistance early on, such as finding funds to help reduce tuition burdens or choosing educational options that won't strain the family. Another effective technique is to encourage them to work part-time while studying, as research shows that students who work up to 20 hours a week tend to perform better academically than those who do not.

         All of this constitutes a brief overview of financial education that parents should equip their children with without relying on schools or tutors. If parents instill financial discipline in their children from a young age, they will be able to manage their own assets as adults without parental worry.