Kids and MoneyIt has long been discussed at what age people should start learning how to manage personal finance. It was only recently that some high schools began to require personal finance courses for graduation. Also, of course, there is the ever-popular list circulating the internet stating ‘Things I Never Learned in High School,’ most of which is related to personal finance. High schoolers, college students, and recent graduates are almost demanding that some personal finance that will be pertinent to the future is taught in school, yet the question of how early to start teaching it still remains. A new report suggests that the ideal time to start teaching personal finance may be earlier than anyone has thought before.

This Building Blocks Report, by the Consumer Financial Protection Board, makes the assertion that personal finance should start being taught at age 3. That’s right; preschoolers should be encouraged to practice make-believe play in order to develop their executive functioning. Executive functioning is, in part, learning control and how to plan, which is very helpful in budgeting. It gives people the willpower to maintain control over their actions, so, the sooner it is developed the better. Some make-believe activities that may help children to develop this section of mental processes are setting up a pretend supermarket in your home, playing accountant, and giving children calculators.

Of course, preschoolers will not be able to understand more complicated personal finance lessons, but they will understand basic concepts. Some things that should be impressed upon them include exchanging money for goods and saving money to get something better later. Remember that this is only the first phase of personal finance lessons.

Once children reach their pre-teenager stage, allowance can be used to further teach about personal finance. For example, requiring those receiving the allowance to save a portion of it each time it is given will teach how beneficial saving can be. It can also instill in them the sense that impulse buys, while fun at the time, are not always the best choice. When kids reach their teenage years, purchasing decisions can really start being discussed. At this age, it is recommended to discuss spending habits in all family activities, from filling up on gas to eating at a restaurant. Teenagers should be helping the family make spending decisions, which will ultimately prepare them for making spending decisions with their own finances in the future.

While it is great that some high schools are making personal finance courses standard, it is clear from the above report that personal finance learning should begin even soon. For more information, check out this Forbes article.