A 2013 Charles Schwab Kids and Financial Literacy Study found that most kids form their life-long approach to money around age 7. That being said, it’s never too late or too early to start teaching money concepts.
When’s a good age to start? A good rule of thumb from youth educators says a good time is when kids realize that money is used to buy things (around ages 2-3). Even if your kids are older than 3—and even if they are older that the 7-year old mark—now is always the best time to start teaching your kids about money and financial concepts.
In this post, we’ll be looking at working with small children and the younger grades. Again, you know your child best in terms of their comprehension and attention span. Use everyday teachable moments to discuss some of the very basics about money.
-Allow kiddos to count and sort out coin and bill denominations. It’s a great way to get them working on simple addition and subtraction.
-Explain the basics of an economy—what bartering is and how we trade what we have (usually money) for what we need or want.
-Start reinforcing the concept of Needs Versus Wants and how to delay gratification. These are important life skills which can be practiced in everyday life.
-Play store with them—“buy” things and have them make change.
-Comparison shop and show them how much money could be saved by finding alternative products or substitutions.
-Set a Savings Challenge with them. Even at young ages, kids have more expensive items (toys, bikes, etc.) they’d like to purchase. Offer to match their savings for the item or give them opportunities to earn more money by taking on additional chores.
Next week, we’ll take a look at the Middle Grades and how to help them translate some of the abstract money concepts into more advanced learning!