is the periodic interest rate divided by 100…

Philip, I think it's a little early for this...

Oh yea, this is maybe more bedtime reading.

Not early in the day!

Early in her life.

I just want her to have a good headstart.

They say kids who learn about money early on develop better financial habits as adults.

But she's only three months old!

You mean one fiscal quarter old.

I'm putting her down for a nap.

A recent study found that 44% of Americans consider personal finance to be the most difficult

topic to discuss with others, moreso than politics, religion or death.

Maybe that's why most parents are more comfortable discussing “birds and bees” than “terms and fees.”

See what i did there?

And when parents do discuss finances with their children, they tend to limit it to simple

ideas like saving, spending, and earning.

Researchers at North Carolina University found that children sensed that certain topics were

“off-limits,” including family finances, parental income, investments and debt.

If investments and debt were discussed at all, they were far more likely to be discussed

with boys and not girls.

And most children had no idea why their parents were secretive about these things.

The truth is that money management is one of the most useful skills for getting by in

our modern world, and yet one that many Americans are never formally taught--not in school or

from their parents.

So who does teach today's children about money?

Advertisers.

Who, believe it or not, might not have your family's best interests at heart.

Unfortunately, there are a lot of predatory organizations out there that make big profits

from other people's poor financial decisions.

Don't get us wrong, making mistakes is an invaluable part of the learning process.

But when you're young, mistakes don't hurt that much.

If your lemonade stand doesn't sell enough units to cover overhead, well, you're out

a couple bucks, but you've learned an important lesson on managing cash flow.

That same lesson in your twenties will cost you a heck of a lot more than a couple bucks.

In fact, it could set you on a slippery slope to lifelong debt.

A study by by Edutopia found that kids who were taught financial literacy tended to have

less debt and a higher net worth as adults.

Now we're not suggesting you run off and discuss correlation coefficients with your first grader!

As your child's brain develops, certain topics will be more age appropriate than others.

When a child is between 4 and 6 they're ready to be introduced to the basic concepts

of money: Money buys things, it can be earned, and some people have more than others.

Games that use coins or paper currency can be a great way to make money seem less abstract

and more concrete.

At around 6 to 9 years old, children can begin interacting with money in the real world.

You might decide to give them a regular allowance, or “pay” them for doing extra chores

or getting good grades.

This is also a good time to encourage giving.

Help them pick a charity that they like, and take them to make a donation in person, to

see the human impact of their gift.

Between 10-15, kids become able to absorb more advanced financial concepts, like borrowing

and investing.

If your child has their heart set on a big purchase, you might consider loaning them the money.

You could even consider charging them interest (and putting it in their college funds).

Better they learn the concept from you than a credit card company.

Alternatively, if they've managed to save some money, help them research investment

options like a CD, savings bond, or index fund.

Nothing can get them excited about finances like watching their money grow!

As they become a teenager, you should begin to reveal greater details of your own financial

habits and situation.

I know, it seems… weird.

But frank discussions about your salary, mortgage, taxes--even debt--could give them a huge leg

up as adults.

If there's something in your finances you're not so proud of well...

There's nothing more natural than kids learning from their parents' mistakes.

It's also the best way to familiarize them with the logistics of money management: ATM's,

digital banking, accounting apps.

Show them how you actually keep track of your balances and pay your bills.

Most people have to figure that stuff out all on their own, but it doesn't have to be that way.

Remember, you don't have to be a perfect teacher.

Many parents don't bring up the topic of money because they don't want to say the

wrong thing, but any kind of introduction is better than none at all.

One way or another, your kids will learn these lessons.

Wouldn't you rather it come from someone who genuinely wants what's best for them?

And that's our two cents!