Money Smarts Blog
How to teach your kids about money at every age
Aug 14, 2017 || James Beiderbecke
As you probably know already, kids learn different things during certain life stages. Figuring out how to introduce them to money and when can be a challenge.
The best way to interest kids in learning about money is through fun and engaging activities! Teaching your kid(s) about money early will prepare them for a better financial future. Here are some fun ways to teach your kids the right stuff at the right time.
Early Childhood (3 to 8 years):
At this stage, kids are becoming more independent and developing new skills all the time. This is a great time to teach your kid(s) about types of money, buying things, and banking.
Fun Activities to Try:
Money Naming Game: Lay out coins and teach your kid(s) their names and worth. You can try this with paper money too after showing them 100 cents equal one dollar. Keep an eye out to prevent anyone from swallowing coins! After some practice, ask your kid what each coin or bill is called and what it’s worth whenever you spend in cash.
Playing Store: Get basic items: toys, candy, fruit, stickers, etc. and have your kid set up a store booth. Have them place values on the items and make pretend money to pay with. Your kid will learn about prices of goods and how people buy things.
Bank Visit: Bring your kids with you to open a savings account in their name. Teach the concept of interest and how money will grow simply by leaving it in the bank. Get a piggy bank for home so your kid can start saving their money in a fun way, and deposit the money into their account when it’s full!
Middle Childhood (8 to 13 years):
Kids don’t grow as much at this stage, but their minds continue to develop. Kids this age focus on integrating with society and the world around them. Teach them that their choices matter and how they impact their lives.
Fun Activities to Try:
Allowance: Hard work pays off, and an allowance is a great motivator. Allow them to earn money for doing household chores or playing sports. Bonus money for good grades can be a powerful driver for school performance. Each time they “get paid,” encourage them to put a portion in the bank.
Garage Sale: Have your kid select items they’d be willing to part with. Help them price their stuff reasonably and help run the garage sale. Allow them to keep the money from anything that sells. This activity teaches them to give up things they don’t need and how to value things appropriately.
Three Jar Method: This is a popular way to teach kids about money management. Have three jars labeled saving, spending and sharing. Have your kid decide which jar(s) to put their money into. Have them invest all their money into the jars. Explain how their decision will impact how they’re able to use their money in the future. Your kid will feel empowered by choosing which jar(s) to invest in. At the same time, they’re learning how to manage their money.
Teenagers (13 to 18 years):
Teenage years are a turbulent time with changes physically and emotionally. At this stage, kids are starting to form their personal identities. Teenagers are capable of handling more advanced aspects of money, it’s a good time to teach them about entrepreneurship, college financing, and credit/loan basics.
Fun Activities to Try:
Young Business: Whether it’s door-to-door sales, babysitting, dog-walking, or a lawn-mowing service, your kid will gain experience from a small business endeavor. Show them how to track expenses and charge enough to make a profit. If all goes well, they’ll enjoy some extra cash. If not, at least they learned about the risks of business!
College Discussion: Start searching for realistic college choices with your kid as early as 9th grade. This allows more time to gauge their interest and see what’s financially feasible. Talk about college costs aside from tuition like room and board, textbooks, school supplies, etc. When the time comes, encourage them to apply for scholarships, grants, and financial aid.
First National Bank of Mom (or Dad): Learning the rules of borrowing money early will help your kid in the future. If they want to buy something they don’t have the money for, offer a personal loan if their request is reasonable. Agree on an interest rate and repayment. If everything goes well, consider giving them their interest back.
The saying “It’s never too late to start” is extremely relevant when teaching kids about money. The subject matter is important for everyone to understand, no matter what age. Your kid will appreciate you took time to educate them about money at an early age. As they grow older, they’ll feel more confident and excited about their financial future thanks to you!
Why wait any longer? Open a youth savings account at IHMVCU today!