Kids are absolutely fascinated by money. If you have a baby, you may notice they’ll start showing curiosity about money as early as age three. Unless your baby is completely post-capitalism… which we’d congratulate you for.
Most school don’t teach kids about money, even in high school. Like most things, it’s up to us parents to do it. You can start teaching your kids about money as soon as they show curiosity about it. If your kids are older but you haven’t started, don’t worry - there’s no perfect time for any of this.
For toddlers and little kids (3 - 5 yrs)
You can keep it super simple at this age. First, show them what coins and bills look like, then let them try out using them with your help.
- Counting, sorting, and ordering money - Start with sorting different coins, then explain their value so they can put them in order. Eventually, you’ll be able to do some light math as you show them how many pennies make a nickel, and so on.
- Let them pay - If you’re buying something at the store, ask your kid if they want to pay and give them coins, bills, or a credit card to use. You can support them through the process, but it helps them understand the how money and transactions work.
For big kids and tweens (6 - 12 yrs)
As they say, “this is such a fun age” for money lessons. At this stage, kids can start earning their own money, saving up and seeing how money accumulates, and even learning about donating to charities.
- Earning money with chores - We are fans of rewarding kids for doing challenging “special projects” by giving them money. Allowances that aren’t tied to some kind of work fail to connect money to work, which is a parenting #fail.
- Spend, save, invest or give - Once your kids actually start accumulating their own funds, you can guide them in choosing how much to spend, save or invest. This little bank that allows kids to slot funds into these categories. You can also set up a bank account for your kids!
- Buy it yourself! - When your child has money, you can tell them to buy their own toys, books, or whatever else they beg for while you’re at Target. This helps kids understand that money is limited, can only be spent once, and requires thought and planning.
For teens (13 - 18 yrs)
Teens will start building their credit when they turn 18, so this stage is critical for helping them prepare for managing money.
- Set up bank accounts - At this age, your child should have both a savings account and checking account. You can review the statements together, and even show them your own bank statements.
- Find something to save for - Teens want something to look forward to. Whether it’s their own car, a supervised trip with friends, or a concert, it needs to be something that gives them a sense of independence and accomplishment. Coach them to identify something that inspires them and how much it will cost so they can build a plan.
- Reward teens with independence - If you notice your teen is doing well managing their money, give them positive reinforcement and reward them with independence (the only love language teens respond to).
Remember that there's no perfect way or time to teach kids new things (especially things as complex as money). Start slow and then add more on as you both get comfortable.