More and more states are requiring financial education in schools but teaching children about money has long been left to parents. In order to set them up for financial success, it’s important to start early.  

One look at these Eye-Opening Financial Literacy Statistics will help you understand why we need to make financial education a priority.

There are many benefits to money management that will give your child a better understanding of the concepts of earning, saving, budgeting, and spending money. The key is to give them the lessons and proper tools in stages that they are capable of understanding. We recently identified some helpful resources and tips for kids based on age, from 4 to their early 20’s.  

Ages 4-6, How Money Works

Discussing what money is and how spending and savings work starts early. Some simple ideas include the following:

  • Buy a pretend money set and let your child explore with a pretend store, selling things, buying things, and providing change.
  • Read books that incorporate money concepts such as The Giving Tree by Shel Silverstein and Arthur’s Funny Money by Lillian Hoban.  
  • Give your child a few dollars to purchase something in a store and talk about how much things cost, letting them ultimately decide what to buy.

Ages 7-10, Money Saving Concepts

When your child is between 7–10, you’ll want to continue teaching the value of a dollar and expand into savings concepts. Start small and give them real life examples and opportunities to manage their money.

  • Start a savings jar. It allows them to visually see their money grow. Be sure to count it out as they are adding to the jar. Perhaps even set a goal and make a thermometer chart to track their progress.
  • Berryville is a great online resource. “The four money bears” teach children the four basic options you can choose to do with your money. These four functions include spending, saving, investing, and giving away. There is an interactive online game available as well as a book you can read together.

Ages 10-13, Learning to Manage Money

When your child reaches 10-13, they can begin to understand more difficult money concepts.  

  • Consider expanding your savings jar so that you now have three: one for saving, one for giving, and one for spending. You might designate a percentage of every dollar they receive to go into each jar. For example, 10% to savings, 10% to give away, and the rest for whatever they decide. As a bonus, the giving jar presents an opportunity to talk about helping others and different charitable organizations they may want to support. 
  • Start paying your child an allowance in exchange for designated responsibilities around the house. Having responsibilities instills confidence (that’s another article) and the money they earn will begin to build a strong foundation for learning to budget and save.
  • Break out classic board games such as Monopoly and The Game of Life. Note that there are new versions of Monopoly that don’t take as long as the original!

Ages 14-18,  Earning and Spending Money

Children between 14-18 have so many financial learning opportunities. They may be starting to earn money. They may be raising money for school or extracurricular activities. And they likely want more money for spending purposes. This is a great opportunity to start having important discussions with your teenager.

  • Here is a great article about how to plan for and combat peer pressure that teenagers often experience when it comes to spending money.  
  • Children in this age group may start thinking about making extra money. Here is a great resource for introducing jobs at any age, as well as recommending jobs for busy teens that may not be ready for a full-time job. 
  • This is also the age where some big purchases and responsibilities come into play, starting with a car. Do they have to buy or contribute to the purchase of a car or the insurance?  Do they buy the gas and pay for oil changes?
  • College, if that’s in the future, is likely the biggest purchase coming down the pike. We have found two great resources to help. One for starting the conversation about college and one with more in-depth information on college savings in general.  

College and Beyond, Making Financial Decisions

Your child is becoming a young adult and things like graduation, college, and the working world all require smart financial decisions and good money management.

Overall financial literacy and money management are key in your child’s development through the years. Continuously adding in concepts as they grow to implement healthy saving and spending habits will help them be financially successful later in life. Use these educational resources to start a conversation about financial literacy with your child today!