A study from the TIAA-CREF Institute in 2011, shows that people who are less financially literate tend to accumulate less wealth, borrow more, pay more in financial product fees and are less likely to invest or know the terms of their mortgages or other loans. People with a high degree of financial literacy, on the other hand, are more likely to make plans for retirement, and those who do plan for retirement have more than twice the wealth of people who do not plan.

Money is an exciting topic for kids, and many are eager to learn about earning, spending and saving money, even at a very young age. Most young children are ready to learn the basic concepts introduced here: what money is, goods and services, needs and wants, spending choices and savings goals. Keep in mind, however, that much of this learning is the result of repetition, experience and practice. The more you are able to take advantage of teachable moments - those times when a conversation or activity lends itself to a specific topic - the easier it will be for your child to grow up to be a financially responsibly individual.

For financial literacy directed toward eight to 12 year olds, check out part two in the series, Teaching Financial Literacy To Tweens, or for topics specifically for teenagers read part three: Teaching Financial Literacy To Teens.




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