Children start to learn about money from their early childhood. Parents and carers will have the most important influence on how children deal with money in their adult life. Teaching your children about money from an early age will help them learn to manage their own finances more effectively as they get older. There are plenty of age-appropriate ways to do this by keeping it simple and making it fun.
All children are different and will learn about money a little differently. There are some developmental milestones, however, that can help to guide you with what to teach them and when.
Three and Four-Year-Olds
You might think that this is too young for kids to start learning about money, but you can start teaching preschoolers about money from when they start to talk and ask questions. When your child starts to touch, investigate, and play with everything, you can start simple conversations about money. Toys that include play money and cash registers are a great way to get them familiar with the concept of money, the cost of items, and the important role money plays in everyday life.
Five and Six-Year-Olds
At this age, your child is starting to develop a deeper understanding of numbers and will be able to pay attention to what you are telling them for longer. This makes this a great age to move on from playing with money to showing good money management. Your money lessons should still be fun, but you can start to integrate more money-related skills into everyday life. For example, you could encourage your child to start saving up for a new toy that they want or turn shopping into a learning experience. Giving them money of their own for birthdays or holidays will allow them to take ownership of their money, practice counting and adding, and think more deeply about what items they want to purchase.
Seven and Eight-Year-Olds
Your child is now beginning to understand the difference between their wants and needs. This is a great age to start talking to them about how they can start achieving some of their wants through earning and saving. Giving them an allowance for chores or other productive activities will give them extra incentives. They will also have more opportunities to spend their own money when they are away from their family members.
Nine to Twelve-Year-Olds
At this age, your child wants independence. You can concentrate on getting them to take some responsibility for their own spending and saving decisions. Helping them to learn about how to be responsible with their money can also give you some peace of mind as they start to become more independent in their decision-making. Start talking to them about how you budget for the family, save for emergencies, and make decisions about spending. This is a life skill often not taught in schools, so the earlier they start to learn, the better they will be at handling money as adults.
When your child grows up into a teenager, their aspirations will be bigger, and more expensive. From thinking about what they wear to wanting the freedom that can come from learning to drive, this is an age where money really starts to matter to them.
You can help them to become more money-savvy in three key ways:
- Giving them some financial responsibility
- Setting the right example
- Helping them to manage their first wages
Conversations about money don’t stop when your children grow up. Whether they’re still living with you or have moved out, but are struggling to compare credit, pay off debt, or save for a mortgage, money is a topic that still needs to be discussed.
All children develop at different rates. Adjust as needed, as you may find that your child responds better to some of the activities in the lower or higher age bracket. Choose the activities that are most suitable for your child and set him or her up for financial success throughout their life.