How to Teach Your Child about Money Based on Age

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Money is a topic that your child will interact with throughout their entire life, and as many of us can attest, the earlier you learn about how to handle money, the better off you’ll be. While hardly any parent would argue that point, when is the right time to begin teaching your child about money? Below are some general guidelines, organized by age, to let you know when to begin sharing certain financial concepts with your child.

Kindergarten & Elementary School
* This is a great time to begin introducing the idea of saving money. While it’s standard protocol to go for an opaque piggy bank, try giving them a clear jar in which to store their savings, as it will create a more powerful visual impact for them. When they’re dropping quarters, dimes, nickels, and paper bills into a clear container, they can actually see the money growing, which will intuitively teach them about the power of accumulating savings over time.

* Show them that things cost money. One of the best ways to do this is to help them take a handful of dollars out of the savings jar, and then take it to the store to buy a piece of candy or a small toy. This will help introduce the all-important principle that in order to obtain things, you have to fork over some cash to do so. Not only will this give your child a greater understanding of how our economy works, but it will help them develop the concept of value as well.

* Try setting a small savings goal with your child, so that they can possibly buy a toy (or something similar) that they’ve been wanting for a while after saving for it. This will teach them the importance of delayed gratification, which according to financial experts is one of the most important qualities you can develop in order to achieve financial success.

“Tween” Years (Generally Ages 8-12)
* This is the perfect time to start teaching your child about opportunity cost, which will help them make better financial decisions based on weighing the potential outcomes of different actions. It might sound something like this: “If you buy that giant stuffed unicorn from Toys-R-Us, you won’t have money to buy that pair of shoes you want.” This will help them to develop a sense of priorities in terms of their spending habits.

* Start teaching them the value of earning money based on work completed. Many financial experts teach that this is a much better way to go than just giving them an allowance, which is basically money received for doing nothing. You could arrange it to where they can receive X number of dollars for X number of chores completed each week, or make it a project-based thing where they get a nice chunk of change for cleaning out the garage.

* This is also a great age to begin teaching them about giving. If they can start taking a small percentage of their savings to start supporting a charity, church, or even someone whom they know has a need, it will teach them just how important (and beneficial) generosity is to both the receiver and the giver.

Teenage Years
* If you’ve been practicing the above principles with your child up to their teenage years, they should be more than ready to handle their own bank account at this point. You can start them off with a simple checking or savings account, and be sure to teach them how to properly enter transactions into a ledger.

* The teenage years are also a great time to begin talking to your child about getting their own part-time job. This will teach them the true value of working for their money, and it will also help them develop a stronger sense of self-reliance.

* Teach your child about the good and bad aspects of using credit cards. While they won’t be able to get their own credit card until they’re 18, they should be well-prepared to handle the onslaught of tempting offers that will no doubt come their way as soon as they come of age.

Teaching your kid about money is one of the most important steps you can take to secure a good financial future for your child. Keep the above tips in mind to help make the journey a little easier along the way.

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