Money Smarts Blog

Seven ways I teach my first and fifth grader about money

Apr 23, 2018 || Christina Cress

the toy store is a perfect place for money lessons

Explaining money to kids, let alone a first grader, can be frustrating. Teaching your kids the difference between wants and needs? Let’s face it: kids think they need everything. If we’re really honest with ourselves, some of us parents have yet to fully comprehend the difference.

Teaching your kids how to save money will lead to a lot of tears and stomping feet; the kids might even throw a fit, too.

That’s why I try to make learning about money fun for my kids. As soon as it becomes a lesson my kids tune out, so I try to incorporate it into everything so it never seems like I’m teaching them anything.

My fifth grader, Raymond, gets an allowance, which makes it easy to slip in a lesson about money when he gets paid. My first grader, Annie, doesn’t get an allowance yet, but the opportunity to give her a lesson on saving isn’t lost here either.

There are opportunities everywhere to teach kids about money.  Here are a couple things I do with my first and fifth grader:

  1. Talk about saving
    I talk to my kids about the importance of saving, even if they don’t always want to hear it. I find the best (and most nerve-racking) place to be the toy aisle. This aisle brings out the ‘I wants” and a lot of lessons can be learned here.

    If my kids want something, I ask them questions: do you have enough money for that toy? If you spent that much, how much would you have left? Do you really need it? Raymond likes to save for big Lego sets and collector action figures. I remind him of this and let him know how long it will take to save up enough to buy those things.

    It may seem like it’s falling on deaf ears, but keep it up. Eventually it will sink in. Don’t expect instant gratification, but eventually they’ll point out what you’re doing wrong. It’ll warm your heart when you hear the words, “Mom you don’t have enough money for that” the next time YOU try to make an impulse buy.

  2. Make saving a requirement
    If my kids get any money for their birthday or a holiday they must put some in their savings. I sort of let them decide how much. Nothing is not an option and it has to be more than $10. I wish I could say there’s no argument. My response to them about their apparent torture?Just because you have it doesn’t mean you have to spend it.

  3. Make it fun
    We play Monopoly. This is a clever way to teach counting and money management at the same time—learning disguised as a game! I let Raymond and Annie know as we’re playing that they need to be careful how much they’re spending and how much they have left. Raymond likes to buy every property he lands on. I constantly remind him to make sure he’s not running out of money. I remind them to think about purchases before they make them.

    The best thing this game teaches is patience. And that’s exactly what saving money takes too.

    Hasbro has a lot of different versions of Monopoly. Want paperless? Try the electronic banking Monopoly. Are your kids Disney or Star Wars fans? You can get these versions and more. There’s even Monopoly Junior for younger kids who can’t sit through a full game of the original.

  4. Learn from mistakes
    Mistakes are welcome! Believe me I have made plenty. I may have run out of money in my checking a couple times and gone negative. This is when a savings account comes in handy. I explain what I did wrong and what I should have done differently. They don’t expect you to be perfect.

  5. Use piggy banks
    Annie loves dumping the money out of her piggy bank and counting it. So I put her piggy bank up on a shelf. If I don’t it will also end up in about ten different purses she has. Just something for you to think about.

    Let your kids pick out their own bank, something that fits their personality. There are many kinds of piggy banks from super hero to princess banks. This is something you can easily make at home, too.

    The best ones come from your child’s imagination. Save that Pringles container or peanut butter jar and let your kids create something only a mother could love! Pinterest is a great spot to look for ideas.

  6. Have them save up to buy wants
    My son loves Amazon. (Yes, that’s my fault!) When he finds something he wants, he tells me how much it is and I let him know how much he has left of his allowance.

    We go over how much money he’ll have left if he buys that Spiderman action figure he wants. I ask him, ‘What if something else comes up you want?’  So, instead of buying right away we create a savings goal. Once he reaches his goal he can buy it.

  7. Open their own savings accounts
    This is something I think is extremely important. Kids need a safe place to put money so they don’t have direct access to it. My fifth grader has two accounts: one is his college savings and the other is his allowance account. This is a great way to establish long term and short-term savings.

Now that your kids have a great (or at least better) understanding of money, have some patience with them and remember saving is not something your kids will pick up overnight. It will take time and, well. . . money. Your kids will need reminders, but if you’re consistent and teach them good habits they’ll get it eventually.

If your kids don’t have a savings account there’s no better time than now to open one. Check out the youth savings account IHMVCU offers.  Kids 12 and under even get a free piggybank when they open an account!

So open that savings account or create that piggy bank. Have fun with it!

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