Teaching children about money doesn’t have to be hard. If you start at a young age and incorporate it into your daily lives it will make it easier for you and your child. Don’t wait until six or seven, start when they are two. The earlier kids learn about money the earlier teaching kids to save will be.
Teaching Children about money
Age 2 to 3
At 2 or 3 years old don’t worry about teaching your child the value of money. They won’t understand it. Instead, focus on teaching them to recognize and correctly name each coin.
You can do this a few ways but my favorite ways are having the kids to play money counting games.
Play games like count the pennies, count the nickel, count the quarter, and count the dimes.
Have your child sort coins into separate bowls, or you could play the money flash card game with them.
Another great way is playing store. We bought Little Miss a toy cash register and started playing store with her. Since she is two we don’t focus on the value of the money so instead of saying “give me 20 cents” we tell her to give “two dimes” or “four nickels” this helps her learn the names in a fun way.
Another thing we do is at the end of the day when dad is emptying his pockets the kids name and count the coins he takes out of his pockets. You wouldn’t believe how much fun they find these daily.
Age 4 to 5
This age is when money got real for my oldest. He really started to understand that if he wanted to buy something he needs a specific amount of money to do so.
When we play store with my Little man instead of saying “give me two pennies” we pay him and then allow him to subtract what we owe from payment. We try to keep it simple and work it out with him. For example, if we “owe” $3.00 we will pay him $4.50. As he has started to get better I’ve started asking for specific change such as if he owes me $1.50 I’ll ask for .50 to be in dimes.
Coupons. When I am doing my weekly couponing, I include him. We talk about how much each coupon is worth as we are cutting. I usually do shopping alone but when we have the time we like to take him to the store and let him use coupons and pay the cashier. He loves it.
We also started teaching our son how to save for things he wants around this age. Little man wanted this huge Nerf gun it was expensive, so he saved up. It took awhile but the look on his face when the post office delivered it was pure pride. Teaching children to save is one of the most important things you can teach them.
We start chores around our home early, but around 6 is when you should start putting a value to each chore rather than just an overall weekly allowance allowing your child to understand that if he does this task he gets paid. If he doesn’t then, he doesn’t get paid. Teaching children about earning money goes hand in hand with teaching children about money.
I would also suggest really starting to teach your child about saving at this age. Find something they really want that is a little pricey and start your child a piggy bank or savings jar just for that money. This will help them understand that the money is separate and not to be touched.
9-12 years old
At this age, your child really should know how money is made and that it’s not just paper. A good place to start is either the usmint.gov.
Start have open conversations with your child about bills. Now I’m not saying your child should know your entire budget, but they should know that cell phones aren’t free. Cable isn’t free. Let them go with you or hear you making payments on those things.
Allow your child to sell things on swip swap. Of course, you should never allow your child to meet with someone alone and always teach your child the risks of the internet. I always make it a practice to meet anyone I am selling to or buying from and the local police station. Allowing your child to see you taking safety precaution but also earning money helps them understand things they already have are valuable.
A book for kids this age about money: ABC of Financial Intelligence for Kids
13-15 years old
This is the perfect time to teach your child about budgeting hopefully your teen will have a summer job plus allowance, so he will have extra money. Help them set a budget on where that money will be spent and how to handle it responsibly.
Get your teen a summer job! They don’t need to be stuck at home all summer doing nothing. Allow them to earn money and get practice for the real world.
Open a checking account. When your teen has their first job open them a checking account up and start teaching them how to not only track expenses but to also balance a check book.
One big thing you need to do is explain credit cards to your teen, and let him know around his 18th birthday pre-approved cards are going to flood the mailbox. He needs to understand what a massive impact a credit card at this age can cost him down the road.
A checking account and a summer job or part-time after school job combined with a teen checking account is a great way to teach your teen responsibilities but also keep some control. They get the freedom of controlling their money and you get the comfort in knowing you can watch over their account.
Credit scores are important. Make sure your teen know how to care for and raise his credit score.
Student loans. You child is fixing to jump in the ocean of student loan sharks. Teach him that just because he can get a loan doesn’t mean he should. This could follow him the rest of his life.
Related: Teach your teen to save
Teach your teen that he should give and enjoy giving.
Give your child the freedom to make mistakes, but also make sure you’re there to keep them from making massive life altering ones. If your child takes a credit card out, it’s his job to get rid of it. Having money empowers kids and lets them stand on his own two feet and feel accomplished. Teaching children about money isn’t a sprint it’s a marathon.