You don’t need to create formal lesson plans to teach kids about money. Everyday activities — playing store, shopping for groceries, buying a piggy bank — can help them learn how to be financially savvy.
A survey of 15-year-olds in the United States found that 18 percent of respondents did not learn fundamental financial skills that are often applied in everyday situations, such as building a simple budget, comparison shopping, and understanding an invoice. But when should you start teaching them about money? It’s never too soon. This guide offers age-appropriate ways to help your kids up their financial literacy game.
Under 5: Make It a Game
Preschoolers love playing make-believe. Set up a “store” and use play money for children to “shop” with. This will give you the opportunity to talk to them about the exchange of money for goods and services. This interactive money game also introduces them to the idea that there is a cost for their favorite toys and foods — and that money doesn’t grow on trees after all.
Ages 6 to 8: Give Them an Allowance
Offering an allowance is one way to jumpstart financial literacy for kids. Some 68 percent of parents give their children an allowance, with the average allowance totaling about $68 per month. And more than 80 percent of parents believe getting an allowance teaches children about financial responsibility.
Once you start giving your child an allowance, it’s important to talk about the importance of saving. An easy way to teach kids to save money is to encourage them to put a portion of their earnings into a piggy bank. Or you can take them to the bank to open their first savings account. Either way, this will help your child make decisions about spending and understand how much things cost.
Ages 9 to 12: Teach Them to Save for What They Want
Tweens might want to earn extra cash for special purchases by taking on more chores or running a lemonade stand. Teaching them to save for the things they want, rather than expecting the bank of mom and dad to hand over the funds, can help drive home the importance of saving.
Ages 13 to 15: Have Them Do the Shopping
Teens are old enough to make some real-life financial decisions. Give yours the grocery budget for the week, and have them make a shopping list, compare prices and make decisions about meal planning. Or ask them to research cellphone plans and make a proposal for the best family plan based on cost and services. These exercises teach kids crucial lessons about household expenses and budgeting.
Ages 16-plus: Talk to Them Like an Adult
Once teens start working, it’s time to have conversations about “adult” topics such as taxes and college financing, including student loans. At this age, kids can also be introduced to stored-value cards. These preloaded cards, which look like credit cards, can be used in place of cash or credit, and teach teens even more about budgeting, something that will help them throughout their lives.
Take the Next Step
As your kids become adults, taking the right approach to money becomes even more important. Talk to your local Farm Bureau financial advisor for more information today.