It's never too early to teach kids about money beyond just using a piggy bank as a toy. From a young age, children observe how money is used and begin to form ideas of their own surrounding the crisp bills and shiny coins they'll one day find in their own pockets. Starting early, parents and teachers have the ability to impart knowledge not only about money itself but how to save it and spend it wisely. When these lessons begin at the preschool age, it creates a solid foundation that can continue to be built on over the years as their knowledge grows. New information and new opportunities enhance their understanding. Teachers can incorporate lessons about money using a variety of subjects, including math, making it easy to fit these ideas into the curriculum seamlessly.
One of the most basic lessons a child will need to learn is that sometimes, people have to wait to buy something they want. Delayed gratification is something that even adults struggle with at times. Early childhood is the perfect time to introduce the idea of saving up for something big and being patient until you can have it.
Kids also need to know that they can make choices about how to spend their money. As kids get old enough to earn money for doing chores, this is an opportunity for parents to discuss making good decisions about making purchases. Building on the idea of saving, kids must learn the concept of needs versus wants. At this point, an allowance can be used as a learning tool. Children can begin to decide what they will do with their money and get real-life lessons when they spend wisely or make monetary mistakes. This is also a good time to begin introducing the concept of giving money to others.
With a solid money management background, kids can continue to gain experience and put these concepts into practice as they grow. From understanding how to calculate interest to comparison-shopping, important life skills can begin to take shape. Older children can be introduced to checking and savings accounts. How debit cards work and how they are different from credit cards is also an important lesson. Ideally, this information should be given to children before they are out on their own, making financial decisions without any influence from their parents.
While all of this starts with the recognition of coins and dollars and their value, there are countless things that kids can learn about finances, and these lessons are important to convey throughout a child's life. One of the biggest things to keep in mind as well is that children learn by watching. This means that parents have a lot of influence over how their children see money, spending, saving, and even investing, and it's crucial to set a good example for kids to follow as they continue to grow and learn.
How to Teach Preschoolers How to Save
Teaching financial responsibility and positive money habits can start young! Use basic counting skills to help your child count real money (or play money with Elmo on it) or add up their own piggy bank savings. You can then use that number to look at items together in a store and challenge them to find something for that amount or less. You can also ask questions about what they may like to buy to explore their unique interests and create quality time together.If they want something more expensive than their current savings, use that opportunity to teach them how to add to their savings until they have more to spend. The basics of addition and subtraction may be too advanced for preschoolers, but this is still an excellent time to start explaining basic math as it applies to their own savings and eventual purchases.
Resources for Preschoolers (3-5 Years Old)
How to Teach Elementary School Students How to Save
Elementary school-aged children can earn an allowance for simple chores around the house and apply basic math to help them create good habits around money. Healthy financial habits will not only help them learn that they will have to work towards the things they want, but setting up an allowance can help them foster discipline around saving their money to get the things they want.Allowance and chore apps, where young kids can collect their earnings after they complete their chores, can also be a fun way to blend good savings habits with new technology. Get them excited about saving and encourage them to work towards their goals as they watch their balance grow on the app. Resources for Elementary School Students (Grades K-5)
How to Teach Middle School Students How to Save
This age group (usually ages 10-14) may be ready to take on more demanding chores in exchange for an allowance or pay. With the proper supervision, they may also be able to take on summer or weekend jobs, and even open or have a debit card under your control. With more responsibility and chances to earn more, this is the ideal time to lay down a strong foundation and understanding of financial responsibility. They also have the math skills of addition and subtraction in place to create their own savings plans and budgets. Finding out what motivates your pre-teen and guiding them to their financial goals can be rewarding for both of you.Have them record their expenses so they begin to see where their money is going and how they may need to change to get to their savings goals. Ask them to help you plan a family meal for a set amount and do the shopping together to see how they can stay on budget. They may surprise you with their resourcefulness by downloading grocery store apps to receive coupons or extra discounts. Try challenging them to find ways to save on the family’s household expenses and funnel those savings directly back to them. You may be surprised how your own 12-year-old is suddenly turning off lights and reminding other family members to keep showers to under 10 minutes! Resources for Middle School Students (Grades 6-8)
How to Teach High School Students How to SaveLearning to make sound investment decisions while in high school is the perfect foundation before teens head to college or out on their own. Since many high schoolers may be working part-time jobs to earn extra cash for a car, college, or other goals, they may have small savings they can start to manage under your guidance or that of a certified financial planner.The basics for any high schooler should cover an introduction and understanding of budgeting, creating a budget, and the pros and cons of credit cards.While 529 Plans and retirement accounts are more of a priority for parents, you can use your own investment accounts to introduce and guide teens through the basics of investing, the stock market, interest rates, and how to create a solid savings plan.
One of the best ways to teach your teen financial literacy is to introduce them to the concept of compounded interest since they have the advantage of time. Teaching them that saving as little as $50 a month (or about $12 a week) can add up to several thousand over 20, 30 or more years in a simple savings account.You can inspire and guide teens even more by having them work with a certified financial planner to help them invest their savings into low-risk diversified mutual funds that can earn higher returns over a basic savings account. Plus, using the advantage of time, a teen’s savings or investments can often ride out the lows of the stock markets to help grow their nest egg into something substantial that could offer them more financial independence.Resources for High School (Grades 9-12)
Advice for Parents Teaching Kids About Money and Credit Cards
The best way to teach kids about money (regardless of age) is to set a good example with your own budget and money. Letting the kids in your family see you pass up some items and explaining they are not in the budget, or even just saying "no" (gently) to an on-demand request in the store for an unplanned toy or clothing purchase, is the first step. You can explain that the item is not on the list or in the planned budget and offer them ways to earn money and save up on their own to purchase the item in the future. Or, maybe you’d be willing to match them dollar-for-dollar to help younger kids get there sooner and keep them encouraged.Using your own credit cards wisely is also a way to set a positive example about the best way to use credit cards. For older kids, you can open up a discussion about good versus bad credit and warn them of some of the pitfalls of charging things. While they may receive immediate gratification from charging an item they cannot afford, you can explain how the interest payments could cost more than the item itself. Apply your own logic to your budget and credit card usage. Leading by example is the best way to teach kids about financial responsibility.Challenge older kids to make a case for charging something they want (like a fun family vacation) and see what they come up with. Give them a budget to work within and let them sift through any pros and cons of charging large ticket items. They may surprise you with their financial savvy and creative ways of using credit card points or rewards that could work to their advantage or the family budget. Or, maybe they'll conclude that the interest that would be paid for a big trip could be better used towards something they really want (like being put towards savings for school or university) —and let them make a strong case for it!Lastly, for parents, teaching financial responsibility is not always about saving and keeping money for ourselves. Teach them a lesson about money that will last a lifetime by teaching kids about the importance of charity. If they ask you hard questions about people they may see without things like shoes or even homes. In that case, you can use this to talk to kids about using some of their savings or piggy bank funds to help others. Ask them if they want to donate 10% of their savings to a charity that helps save animals or helps buy toys or clothes for kids of families who may not be able to afford such items. Not only does talking about the importance of charity help your child appreciate the things they do have, but it could also encourage or inspire them to earn or save money purely for the sake of donating to charity – which is a money lesson that is priceless to all.
In ConclusionAbove outlines some of the basics and free resources for teaching kids about money. Hopefully, this list has been a helpful resource for you! For all the teachers and educators reading this post, you can also check out the Teachers Discount Guide with over 150+ coupons and discounts just for educators. An exhaustive list of deals across tech, supplies, clothing, and more. Also, find exclusive Dell discounts for your next computer or electronics purchase, or save with Udemy coupons to further your online learning. Those are just a few examples, but plenty of savings can be had!
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