If there's one person who understands the importance of teaching children responsibility and financial literacy, it's Warren Buffett. It is very necessary that parents begin to point to children, from an early age, the relevance of money. It is essential to teach how to deal with it. The bad news is that not all parents do this early enough, which results in children not knowing the value of their parents' currency and salary.
Read more: Financial education for children: importance of discussing finances with children
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As well as being one of the most important investors in the global financial market, Warren Buffett is also one of the richest people on the planet. In 2019, his fortune was estimated to be around $90 billion.
He says his father was the biggest inspiration. He says that everything he learned from an early age was with him, because his father taught him to acquire the right habits. The saving lesson, for example, was the most important one he learned.
In an interview, Buffett was asked what he thought was the biggest mistake parents make when teach your kids about money, and the billionaire said it's not about not teaching about basic finance in pre school.
Studies on children's development
Looking at all the aspects that Buffett brings up, researchers have observed that 80% of our brain growth occurs by age 3. As a result, one study from the University of Cambridge found that children are already able to understand the basics of money between the ages of 3 and 4.
Around the age of 7, the basic concepts that are related to financial behavior are usually formed. Buffett admits that most parents already recognize the importance of teaching their children about money management and how to manage it properly. But there is a difference between knowing and acting.
According to a survey by theT. Rowe Price 2018, which collected responses from 1,014 parents (with children aged 8-14 years) and over a thousand young adults (aged 18-24), only 4% of Caregivers said they entered into such a relationship with their children and discussed financial issues with them before age 5. years.
Furthermore, only 30% of parents start educating their children when they are 15 years old or older while 14% point out that they never did. In other words, the notion of financial responsibility is taught later in life or very late for these young people, something that can have negative consequences in the future.
