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How to Teach Your Kids About Money At Every Age 

how-to-teach-your-kids-about-money-at-every-age

Money conversations have been taboo for too long and it’s time to break the rules and start teaching your kids about money. The risk is too great to leave that task to someone else. Below we are going to dive into teaching your kids about money at every age so you can set them up to make smart financial decisions in the future.

How to Teach Your Kids About Money At Every Age 

It doesn’t matter how old your children are, you can introduce financial concepts in a variety of ways. Generally, the intensity of financial concepts will increase with age. However, we know that every child is different so start where you think your child could benefit most and then work your way through. 

Ways To Teach Toddlers About Money 

1. Teach Them How to Identify Coins 

When looking at coins, most young children will think the nickel is worth more than the dime. It can be a good exercise to teach children what coins are called and what they are worth at an early age. 

2. Play Store 

Once your child knows how to identify coins, use them to play store or restaurant. You could even go so far as to put price tags with the symbol of the coin on items. Then you can help them make a purchase. Keep it fun and light and pretend of course. 

3. Use a Container to Save 

At this stage saving up for a wanted item or experience is a crucial money lesson. Use a piggy bank or clear jar to keep coins and money in, but be sure it is for specific items, like a toy they want. 

You can expand on this money lesson by giving your child the option of putting money in the jar or spending it on something smaller, (like a gumball). No matter what they choose it can start to connect actions to consequences when it comes to money. 

Finally, once the money is saved, make a day of buying the wanted item. It should be a major celebration. 

Ways to Teach Elementary and Middle Schoolers About Money 

1. Make Coin Collecting a Hobby 

If you see coins on the street, always stop to pick them up. You can even turn coin collecting into a hobby and try to get all 50 states in quarters. This kind of habit for elementary and middle schoolers instills saving without it being labeled as ‘saving’. 

2. Open An Account with Them 

Many banks and credit unions allow minors to open savings accounts with their parents. Make a big day of going to the bank and putting money away in the account. Keep the event of going to the bank and putting in money a regular occurrence. If your child is much younger it can be a good idea to attach a reward to this trip. This might look like saving $5 and spending $2 on ice cream. (Save more than you spend)

3. Start An Allowance and Budget

If you have not already this age is a great time to start an allowance and a budget. The two must go together. The idea is that you are preparing them for a future income and how to manage it. 

Keep this simple at first by handing your child the money and then writing a list of what they want to do with that money. Be sure to insist that a portion of the money must be saved. This way they can see how the money can be divided out across needs and wants. 

4. Have your child check your savings apps

While it used to be normalized to clip coupons as a way to teach children about a frugal approach to shopping, this is no longer as applicable. It could be more beneficial to have your child use one of the apps on your phone that saves you money. For example, the grocery store Safeway has a “Save 4 You” app. It allows you to claim $5 off your purchase and scan items in the store for sales. 

5. Compare prices at the store 

When you’re at the store ask your child to compare prices between similar items. Make it a ‘hunt’ for the best deal. This can easily be done when comparing generic to name brand. 

If your child is closer to middle school, it could also be a good time to look at the cost per unit on the price tags of items that are the same price, but one may contain less in the container. 

6. Have a garage sale and have them run the ‘register’ 

If you’ve been wanting to declutter, consider having a garage sale and have your child run the register. Help them make change and negotiate with shoppers. If you don’t have enough to warrant a garage sale, consider having your child help you list items for sale on OfferUp, Facebook Marketplace, or another app. Involve them in the negotiation process and give them a portion of the sale when the item is sold. 

7. Look for opportunities to have them earn money in the neighborhood 

If you feel comfortable with your neighborhood, look for opportunities where they could make some of their own money. This could be offering to mow lawns, walk dogs, or even bring in the trash cans from the curb. 

Ways to Teach Teenagers About Money 

1. Help them look for a job and prepare a resume 

Making money as a teenager is a way to earn freedom as well. Help your child find ways to bring in an income by preparing a resume together and reviewing jobs online. 

If you want to expand on this, have your teenager consider multiple streams of income. This could be a job and a side hustle like babysitting. 

2. Take action on giving back 

At this age, it can be easy for children to become self-absorbed. When possible look for opportunities to give back within your community. This will instill the habit of giving and looking outside oneself for perspective. 

3. Open a college savings fund 

If you have not already, this is the perfect time to open a college savings fund with your teenager. After this is done begin looking at colleges, not to have your child pick one, but to have them compare prices. The difference between tuition rates at local, out-of-state, and private universities can be staggering. It could also be a good idea to consider trade schools and alternative education to a university. 

4. Teach them about credit and credit scores

Credit cards can be dangerous, but they can also be a great way to begin building credit as young as 18. It is essential to teach your teenager about debt, interest rates, and how to use credit as a way to build your credit score, not tank your financial future. 

5. Create a scholarship calendar & apply for the FAFSA

Paying for college will be a major expense for you and your child. Work with them to create a scholarship application calendar so they can work to contribute to their future education. This is also a good time to discuss student loans, including the difference between federal and private student loans. Don’t forget to have the Free Application For Federal Student Aid (FAFSA) on the scholarship calendar as this helps your child become eligible for grants and additional assistance that does not need to be paid back. 

6. Have them help you with taxes 

Taxes are one of those most dreaded adult money tasks. To help with some of the fear around it start having your teenager help you with your own taxes. Seeing the process will allow them to approach this with much more confidence in the future. 

7. Introduce the magic of compound interest 

Teach your child about the magic of compound interest and investing. Using a calculator can be a helpful visual for your child to see how they can reach millionaire status by saving and investing consistently over time. You can even try the calculator at Finch to get started. 

Key Takeaways When Teaching Your Kids About Money 

As you work to build financial concepts, it’s important to keep the following in mind: 

  • There is never a “perfect time” to talk about money. So, dive right in. 
  • Make money conversations accessible, like leaving the office door open when managing your own finances. 
  • Be conscious of word choices to help establish wants vs needs. 
  • If it’s possible have your child get involved with your own finances with a learn by doing approach. 
  • Absolutes generally don’t work when it comes to money, so try to avoid those statements and take a big picture view. 

It’s important to remember over time these concepts build. Your child probably isn’t going to “get it” overnight. Instead, the goal is to have created a strong financial foundation once your child reaches adulthood. 

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