Kevin O’Leary explains when to start teaching kids about money
Parents don’t need to dive into personal finance details with their kids, says O’Leary, but they should explain “what money is and the concept you work for it, what you actually do. something to solve other people’s problems. and they reward you with money. “Having discussions about money and how it’s made at the table is really, really important,” O’Leary told CNBC Make It. “The concept of saving money and how the world works is something that even a child can understand from an early age.”
It is really very important to have discussions about money and how it is made at the table. The concept of saving money and how the world works is something even a child can grasp from an early age.
Chairman, O’Shares ETF
The goal should be to help children have a âpositive connectionâ with money and understand how it can benefit them when they want to start their own families, he says. By teaching children about money from an early age, “you are doing them the greatest favor of their lives.”
Having a positive relationship with money is important, as is having a basic understanding of concepts like debt and interest. O’Leary says his own children were familiar with the concept of debt when they were little.
âWhen my son was 6 and my daughter was 6, they knew what debt meant,â he says. “These very simple concepts are important because they help counter the damage done by credit cards in the hands of young people who don’t understand what happens when they don’t pay off their debts.”
And according to O’Leary, parents can’t just sit back and expect their children’s teachers to give them the information they need to be successful. He says children don’t learn enough about debt in school, calling it a “parody”.
O’Leary’s advice is consistent with that of other experts, such as Warren Buffett, who previously said the biggest mistake parents make when teaching their kids about money is waiting too long. . A study from the University of Cambridge found that children are already able to understand basic money concepts between the ages of 3 and 4. By age 7, the basic concepts relating to future financial behavior will generally have developed.
âIt’s your responsibility as a parent to do this,â says O’Leary. “It sits on your shoulders.”
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