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When Should You Start Teaching Kids About Money?
I was at a friend’s house last week and her daughter was so excited for her new toy. Her mom bought her a toy cash register at the store and she (3 years old) wanted to play store with everyone at the house.
Without any direction, I watched her take the cash register out, round up the play coins, paper money and oh yeah the play credit and debit cards.
The play cash register also came with play products like milk and cereal which she piled into the tiny play grocery cart it also came with.
She had us bring our products up to the register and she rang them each in one by one and gave us a total to pay. Of course, her math was a bit off but hey she is only 3. Each transaction was different, sometimes she would swipe our credit cards and open the register to give us the paper cash back as change and sometimes she was having us pay in cash.
That moment prompted me to wonder, when should we start teaching our children about money and what are some of the best ways to go about it?
At only 3 years old my friend’s daughter was already picking up on how transactions work. She was absorbing all the things she saw on trips to the store with mom. No one had to tell her a thing when she was playing with her cash register. She just opened up the register and started doing everything she knew about registers, shopping, and money.
You may or may not be surprised to learn that we should start teaching our children about money when they’re just two years old!
While your child may be older than that right now, the experts say that it’s important to get started teaching them about money as soon as possible. BUT it’s never too late to begin so no matter the age of your children, there are concepts we can still teach.
So let’s take a look at the concepts that we can teach our children at every age.
Teaching Preschoolers About Money
At this age, we can teach our children about the concept of money – in other words, what money is and what it does. We can talk to them about the value of different coins and bills. We can also teach them that money is used to buy things and also to save and give.
Playing store is an easy way to begin teaching the concept of money to young children. You can see that in the story I shared with you above!
An inexpensive register is a great affordable way to learn. They have a lot of different styles on Amazon.
Early Elementary School
At this age, it’s a great time to start teaching children about the difference between a want and a need (because we know they sometimes “need” things at the store). Children can help with the grocery shopping and begin to participate in decision making.
This is also a great age to begin showing your children how to use a piggy bank and to introduce the concept of an allowance and working for money. By the end of elementary school, they should understand saving money to buy things that they want.
I remember I had a piggy bank (which was a jar) growing up and I really think that helped me be the saver I am today. I saved every penny I received and put it in my piggy bank.
Junior High School
At this age children are more than ready to begin earning money. You can tie allowance to extra chores or give them opportunities to earn money around the home. It’s also a good time to teach them about saving for their future and for things that they want to buy in the near future like a new pair of sneakers or sports gear.
This is a great time to introduce a system like FamZoo to the family. If you haven’t heard of FamZoo you’ll definitely want to try them out. It’s basically a family “banking” system designed to teach kids to earn, save, spend, and donate money wisely in a safe, friendly environment. Parents are the “bankers”. Kids are the “customers”.
By this time your child should have learned some financial independence. Hopefully, they’ve had the opportunity to work for money and they have learned about saving for both short-term and longer-term goals.
Once your child is in college they will be well on their way to financial independence. Sure, you may be paying for college and helping them manage their finances. However, they should also be able to handle the majority of their financial decisions on their own.
A great way to have your children be involved in college planning is by having them look at the cost of colleges with you and having them apply for scholarships as well.
If the scholarship process scares or overwhelms you, you should check out The Scholarship System which is a course that teaches parents and their children how to apply for multiple scholarships and secure thousands for college. It’s a great way to involve children in the financial process. You can check that out here.
It’s never too late to begin teaching our children about money, saving, giving and investing in their future. Let’s check out some teachable moments.
Teaching our children about money takes more than one conversation. Using real-life situations and examples will help them pull the concepts together. They’ll learn not only from our words but also through our actions.
Here are a few ideas and opportunities to talk to your child about money.
When They Receive Monetary Gifts
When our children receive gifts for their birthday or another holiday, it’s a great time to talk to them about saving some of the money. We can even help them plan how they’re going to save and what to save for.
When You Visit the ATM
To our kids, the ATM is a magic box that spits out money when you enter a secret code anytime we need it. Don’t we wish! But that’s what our children might think if we don’t talk to them about what the ATM is and how it works. It’s a great opportunity to talk about earning, saving, and making spending decisions.
When You’re Shopping
Chances are that your child goes with you when you go to Target or the grocery store. This is an ideal opportunity to explain to our children about budgeting. We can talk about how different items cost different amounts. We can even ask our children to help us compare prices and find the cheapest priced item on the shelf. This can make saving money fun for them.
Creating Your Monthly Budget
Many adults intentionally don’t talk about money in front of their children. However, in many cases, that’s a mistake. When children are aware of the family finances and understand about income and expenses, it helps them see the big picture.
It’s also a good opportunity to talk to our children about different ways to save money and why they might want to save money.
For example, we can talk about turning the lights off when they leave a room and using any energy savings to put toward something fun for the family like a vacation.
Of course, we don’t want to create added stress for our children if there are financial difficulties. However, involving them in discussions about your budget helps them have a better understanding of money.
If you give your child an allowance, it’s an opportunity to talk about their decisions and what they’re going to do with the money. Depending on your child’s age you may have requirements for their allowance.
For example, you may require them to donate some and save some as well. You also want them to work for their allowance and do things in addition to their regular chores. Their regular chores should be expected because when they become adults they will still have them and won’t be getting paid to do them.
With busy lives, it’s easy to overlook opportunities to teach our child about money. However, they’re present almost every day. Take advantage of them from time to time and involve your children in your financial decisions and responsibilities to help them learn, both through words and actions, about money.
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