As young as five years old children can begin to learn about money. Children enjoy getting your extra change and sorting pennies, nickles, dimes and quarters...and having their own special bank to save them in. These activities can teach early math skills and help them begin to understand the value of money.
Children should understand early on that the money that comes into their home each month must pay the cost of housing, insurance, transportation expenses, clothing, groceries and other necessary expenses. Taking children to the grocery store with a list and the amount of money the family has to spend for the families meals for a week is one way to introduce them to the importance of a budget.
Children 7 to 10 Years. An allowance can teach children how to budget their money, spend responsibiy, and how to save towards a goal. Talk to your children about what your expectations are on how they are to use this money. Such things as the latest gaming device, music CDs, entertainment, or saving up spending money for a planned family vacation. Additionally, teaching them to put aside some of their allowance each week into savings will help instill this good habit.
Children 11 to 15 Years. This can be a good time to take a child to the bank to open their own savings account. Then when they earn money babysitting, pet sitting, mowing lawns, or doing household chores they have another opportunity to learn the importance of saving a portion of their earnings; one that's not as accessible as a piggy bank. Some banks have special savings accounts for children under 18. An example would be $25 to open an account, no withdrawal fees, no minimum balance, and the savings account earns interest on the balance. It may be required that the parent or guardian have an account at the same bank. Putting money aside into a savings account each time they are paid for a task or job teaches children the necessity of earning an income and a life-long way of managing their money.
Show children how interest accumulates and how borrowing incurs interest charges. Good examples would be to share a bank or other savings statement where interest has been earned and a credit card statement or mortgage statement where interest has been charged. |
Resources
There are many resources available on the Internet regarding educating children about money. You will find excellent books on the subject for adults wishing to instill good habits in their children and for children of all ages. Educators will find activities, lesson plans and an abundance of valuable information to assist them in the classroom.
Visit the provided links below for links to some great sites we've found and for lists of books that will help children in learning money skills and for teachers and parents desiring to teach money skills:
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Teaching Children About Money
