Age-Appropriate Money Lessons for Kids
Money lessons begin at home. Unfortunately, many parents are unaware they've been teaching their kids about money for years. Whether your teen always sees you paying for groceries with plastic (and assumes it's your credit, not debit card), or you frequently tell your eight-year-old, "Put that back. It costs too much", you're forming your child's understanding of money.
If you're ready to get intentional about the money lessons your child learns while under your roof, start with these basic age-appropriate tips to help teach them smart habits that can last a lifetime.
Ages 4 to 5
Help your preschooler learn about money by making it easy and fun. Under your guidance, let them clip physical or online coupons for you to use at the grocery store. As you shop the aisles, make a game of matching the coupon with the product. Explain in simple terms how this activity is helping the family save money.
Teach them to count coins and save money by giving them their first piggy bank.
Ages 6 to 8
Open a Youth Savings account for your little one, but ensure they are involved in the process. They'll feel like a big kid and will see how depositing allowance and birthday money can grow over time. Encourage a coin collecting hobby to spark an interest in how the U.S. currency system works.
The United States Mint - H.I.P. Pocket Change website provides fun, online educational activities for this age group.
Ages 9 to 12
Grocery stores continue to provide fertile ground for money lessons for kids. Ask for your child's help in comparing labels to determine which product offers a better deal based on unit size and price. Remind them that quality can also play a role in how much you're willing to pay for a particular product.
Expand their understanding of money management by encouraging charitable giving. Let them select an organization of interest, such as an animal shelter. Use this as an opportunity to teach social responsibility, which also includes learning how the charity will use the donated money. Encourage them to use their skills to financially support the organization, e.g., lemonade stands, garage sales, craft making, etc.
Ages 13 to 15
At this stage of life, pre-teens should understand how to build a basic budget, know the difference between a debit and credit card, and be able to distinguish between wants and needs.
Your child might be ready for more financial responsibility. If so, consider opening a no-fee checking account like the Teens "N" Charge account. It comes with a linked debit card they can use to manage the money in their account. These accounts require a parent or guardian as co-owners so you can monitor spending activity. Track purchase activity to spur further discussion of financial responsibility.
Expand their current understanding of the financial markets and investing by having them select a stock to monitor over the next 12 months. Let them choose one related to their area of interest. Popular stock categories for pre-teens might include companies that produce footwear, technology, or makeup.
Ages 16 and up
Teenagers who understand the basic concepts of responsible spending and the importance of saving might be ready for a pre-paid credit card. Parents can load the cards, which offers another opportunity for the child to show they can manage their money. Or, if your young adult has a job, they can load the card with their earnings.
It's easy to stumble when you lack a firm foundation. Expect your child to make a few money mistakes while under your care and use those mistakes as opportunities to create valuable teaching moments. Give your child the tools and know-how needed to manage their money before they step out into the real world.