From the moment kids are born, they start learning about the world. Their brains are tiny sponges, soaking up whatever they see. Parents must think about what they want their children to learn. What do you want to introduce to them as they grow up?
Kids need to learn a few basic life lessons, like how to brush their teeth or tie their shoes. Another skill they’ll need is how to interact with and value money — something they can learn earlier than you might expect.
Research proves parental modeling and teaching has a profound and long-lasting impact on financial attitudes in children — more so than academic programs.
Do you want your kids on the path to a successful future? Is so, discover how to teach your kids age-appropriate concepts about money.
Ages 2 to 3
Toddlers are too young to connect coins and dollars with inherent values. However, they can handle money when supervised. Play a matching game with your children — which coins look the same? Print pictures of different money. Then, have them match the photo to the real thing.
Ages 4 to 5
When your child becomes a preschooler, they’ll have a better understanding of what money is and how to use it. Set up an imaginary grocery store in your home and invite them to go shopping. Teach them how to count out coins and dollars in exchange for what they want. You can also let them run the cash register and ask for payment.
Kids will remember this game when you go to an actual store and check out. This experience sets up their understanding of how the world works.
Ages 6 to 8
Kindergarten is the perfect time to start a chore list for your kids. Start with small daily responsibilities, like putting away toys or making the bed. A list is an excellent visual reminder of what they’ve done and what they still need to complete.
When your child finishes the weekly to-do list, offer an allowance. A stipend in exchange for chores reaffirms that hard work results in money. Talk about your job, what you do and how you get cash in exchange for clocked hours.
According to one study, children as young as 8-years-old pay close attention to money issues. Make an effort to talk to your kids to ensure they don’t develop misconceptions about finances.
Ages 9 to 12
Between ages 9 and 12, children can begin to grasp the more complex aspects of money. Now is a great time to introduce cost versus quality. At the grocery store, point out how name-brand cereal costs a few dollars more than the off-brand. The quality is almost the same, but the price is lower.
Kids must learn what’s worth spending money on and what’s not. This lesson will keep them from making impulse purchases later on. To consider the worth of something, think of why you want it and what you’ll get out of it. Look for a book that teaches the value of money in a fun way, like Annie’s Adventures by Lauren Baratz-Logsted or The Everything Kids’ Money Book by Brette McWhorter Sember.
Ages 13 to 15
Young teens can start to work outside the home through babysitting or yard work. They should get used to the idea of leaving the house to earn money, rather than depending on chores.
Help your kid set up their first bank account. They’ll learn how to deposit and withdraw money, handle checks and interact with tellers. A bank account will also introduce them to interest rates. While more than 56% of Americans have money in a savings account, only 46.5% know how much interest they get paid. Teach your kids these skills now to help them excel later.
Ages 16 to 18
Is your teen celebrating their first job? Now is the time to sit down and discuss their financial goals. Bring up long-term topics beyond saving money and building their bank account.
Show them how to save up for college application payments. Outline the cost to apply versus the cost to attend. You can even compare tuition between schools. Use a college cost calculator, which will outline how much they’ll need to save over time to pay for school. Consider factors like books, housing and food plans. Think about scholarships and grant opportunities to stretch savings.
Teaching Kids About Money? Encourage Questions
It’s important to teach kids age-appropriate lessons about money, from counting coins to saving for college. It’s equally vital to encourage questions along the way. Questions encourage active participation and a deep understanding of concepts.
Work with your children now to prepare them for future financial success.
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