Teaching Kids about Money: An Age by Age Approach

You want your children to enter the real world with a solid grasp on their finances. Experts have claimed that teaching young children the basics of money can ultimately lead to a brighter financial future. While you may want to teach your child about money, you know that doing so in an age-appropriate way is essential if you want the lesson to stick.

Do you struggle to figure out what’s age-appropriate to teach your child about money? Here’s an age-by-age approach to help you build up your child’s financial skills from kindergarten through high school.

Ages 4 to 8

At this age, children aren’t always capable of doing detailed math equations to calculate their return on investment. Instead, it’s a great time to begin teaching them the basics of how to save and earn money on their own.

Start by giving your child their very first piggy bank to encourage them to make a wise investment with birthday money, Christmas money, and allowance. Talk about what they want to purchase with their funds and how long it will take for them to earn enough money. If your child is motivated by seeing the numbers, you can help them calculate it how long it will take.

You may also start to give them an opportunity to earn their own money for simple chores. This is a great way to bolster their piggy bank regularly so they don’t grow bored with the process of saving money.

Ages 9 to 13

Children are starting to develop the ability to compare and contrast items with greater attention to detail. By this age, you can start teaching your child how to become a smarter spender. The grocery store is often the best place to demonstrate the difference between purchasing different name brands, particularly when it comes to cost.

You can give your child some freedom over this particular decision by giving them a list and a budget. They will have to determine which items they can purchase using the money allotted for their grocery trip. Parents may need to assist them at younger ages so they don’t become overwhelmed by the process.

Ages 14 to 16

In the early teenage years, parents need to ensure that their children aren’t going to fall prey to plastic credit cards. Many children will immediately sign up for credit cards when college approaches without understanding the inherent dangers of buying something they can’t afford. You can preemptively teach those dangers now by allowing your child to have a debit card that you control. Teach them how to monitor the amount of money on the card, and discuss what may happen if they buy something they can’t afford.

This is also a ripe age to revisit the idea of a savings account. Teenagers have lots of things they could save for, such as a car or college. Help them to portion out their income so that a percentage of it goes into savings each month.

Ages 17 to 18

If your child has a part-time job, it’s time to teach them how to manage their bills. Giving your child small bills to pay, such as their own car insurance or phone bill, gives them some responsibility. This can pay huge dividends when it comes to their financial responsibility years down the road. They will already be aware of the importance of paying their bills, managing those payments in a timely manner, and setting aside funds to cover them.

Teaching your children about money is a slow process, but it’s worth the time investment. Your children will enter the world knowing how to responsibly pay their bills, invest their money, and manage their budget. These skills can help them avoid massive debt and allow them to live more comfortably.

Consider the age of your children to figure out what you can start doing now to prepare them for adulthood. Playing money-based games like Monopoly and simply discussing your own money mistakes can help immensely. What simple steps could you take today to start teaching your children about money management?

 

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