It may not seem like it, but kids are always watching and learning. If you are an adult with a child, teenager or young adult in your life, you are passing down money management habits whether you realize it or not.

While money may seem like a topic reserved for older kids, it is important to remember young children also pick up on adults’ money management strategies. In fact, children begin to pick up on these concepts around the age of 3.

The Consumer Financial Protection Bureau points to three building blocks that help children develop important skills, like financial management, as they grow:

  • 1) Executive function. This helps kids plan, remember, multitask, problem-solve, and control impulses. These abilities start to develop around age three and continue to build throughout childhood.
  • 2) Habits and values. These make take the form of standards, shortcuts, routines, and rules that are used to navigate daily activities, including financial activities. Habits and values develop early in life.
  • 3) Decision-making skills. These are based on knowledge and familiarity with concepts like research and analysis. Teenagers often have several opportunities to practice financial decision-making skills.

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