When it comes to teaching and helping kids learn about money, there are several schools of thought as to when and how to approach it. Generally speaking though, it is never too early (or too late) to help kids learn as much as they can about money, from what it is and how it is earned, to the benefits of saving it and how to spend it.
There are various methods and techniques available for parents to use in order to help their children learn about money, regardless of the child’s age. There are a multitude of Internet sites that contain games and activities designed to help kids learn about money. Parents can also turn to books that contain both practical advice and fun methods for teaching kids about money. Even a good old-fashioned game of Monopoly can serve as a tool for teaching kids about money. However, despite the variety methods, approaches, and resources, most experts agree that there is no true substitute for real-world learning, especially when it comes to learning about money.
Children can usually begin learning about money once they are of school age, or about 4 years old. Parents can help younger children (ages 4 to about 8) begin learning about money by assigning them small jobs to do around the house. We’re talking very young children, so the jobs have to be easy for them to do. Consider options like making their bed or picking up toys after playing with them. Whatever the job might be, parents can reward their children with quarters for their work. Using a piggy bank or a tally sheet that can help children track their earnings and can help them look forward to purchasing a new toy with the money they have earned on their own.
As children grow older, their needs and the decisions they must make regarding money become more complex. Children ages 8 to 12 for example, can be given more freedom to make decisions on how to spend their money. This age represents a perfect opportunity for parents to teach children about comparison-shopping. At this age, parents might also consider giving their children a set allowance, or they can continue to pay children for completing specific tasks and jobs. Parents should consider paying students for more difficult or atypical tasks such as mowing the lawn or washing a car. Regular or expected chores should not be rewarded.
Teenagers and money often represent a bad combination. This is usually the result of poor financial education on the part of parents. For children 13 years of age and older, it is most important for parents to be consistent with how they reward or “pay” their children. Daily tasks should be continued, but parents should keep the idea that they will only pay for jobs that go above and beyond the child’s expected daily chores. Allowances can be increased to allow for age-typical expenses such as movies or school-related events. Parents should avoid the dangers of introducing children to credit or debit cards. At this age, it is best to keep the money tangible, as introducing even older teenagers to credit cards can cause them to lose sight of how it money is earned. When children no longer see the money leaving their pockets, they no longer pay attention to how, or on what, it is spent.