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Raising Money Smart Kids Series-Part 3-The Middle Grades

Moving on to Middle Grade kiddos. This is a great age to really set up some solid lessons—they’re likely getting money from somewhere (i.e. allowance, indulgent grandparents, neighborhood jobs, etc.) and they have the basics of how money works as a tool. Time to make the lessons a little more adult-like.

-Keep reinforcing Needs versus Wants. As simplistic as it might sound, many people (read: adults) struggle with this. The more you go over this, the more likely it’ll stick in the long-run.

-Explain how credit works—the buy now, pay later concept—it can be a thrill to get something without parting with your money straightaway, but it needs to be paid back. Reinforce the notion that they should pay any credit on-time without fail and in-full whenever possible. Make a practical lesson out of this: “I will lend you $20 today to be paid back on X day. If you way it back three days later, you’ll owe me $22 which includes interest and a late fee.”

-Let them see how the “cashless” world works. How do paper checks and debit cards (which comes out of your account with money you have) compare with a credit card (using a credit line you have which has expectations and deadlines for payback).

-Give them a task when shopping. School shopping is ideal for this since they’ll have opinions on what they need/want. Draw up a list of what is needed for them to work off of and a set dollar amount to use to complete it. But, make it a bit of a challenge: force them to make a few trade-offs to complete their list at or under budget.

-This is the prime age for a Savings Challenge: they will likely have something larger they’ll be saving for. Set rewards as they hit benchmarks along the way to reinforce delayed gratification. “If you keep that $100 you’ve saved and not touch it for another month, I’ll put an additional $10 in your account. Alternatively, you can set savings matches: “If you save $20 of your birthday money and leave it in your account for a month, I’ll put another $20 in your savings.”

Next week, we’re hitting the teen years where things can get real.

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