Don’t wait until your child is in their teens to start teaching them about financial responsibility. Children as young as 3 and 4 can be ready to begin learning about money! In part one of this two-part series, I gave some tips for teaching your preschooler about money, mainly focusing on teaching him the different coins and bills, and some other basic financial facts. Once your child reaches school age, the lessons can become more in-depth and practical.
Beginning in the early grades, your child’s school will teach the basics of money including the different types of currency, the value of each coin and bill, how to make change and other basic money skills. Unfortunately, that is about as in-depth as many schools will get. So it is up to us as parents to teach our children how to manage money, and how to do so responsibly. One of the best ways you can teach your child about money is by modeling – showing your child how you earn, spend and save your money. In addition, there are plenty of ways you can build on and enrich your child’s financial education. Below are 10 ways to help teach your elementary school child about money.
All parents are familiar with the concept of allowance. After all, how can a child learn about money if they do not have any? Giving your child an allowance provides plenty of opportunities to teach about earning, saving, spending and even charity. Consider this, when giving your child an allowance, give them the money in denominations that encourage saving. For example, if the amount is $5, give them 5 one dollar bills and encourage that at least one dollar be set aside in savings.
2. The Four Piggy Bank Method
Instead of giving your child one piggy bank, set up four, each one of which will be earmarked for a specific purpose. Gather together four jars and label the first one “Spend“, the second one “Save for Something Small“, the third one “Save for Something Big“, and the fourth jar “Give” (for an added incentive, have your child find pictures of one small item they want to save for and one large item. Cut the pictures out, and attach them to the appropriate jars). Whenever your child gets money, whether it is from allowance, gifts, small jobs, or whatever, let them decide how much to put into each jar. This is a great lesson in saving, budgeting and generosity. Tip – use a clear container so your child can actually see the money accumulating!
3. Set Your Child Up As Your Bill Paying Assistant
When it comes time to pay the bills, let your child help. Explain how each month a certain amount of money needs to be set aside to pay bills. Depending on their age, your child can help with everything from adding a stamp to the envelope (or clicking “Submit Payment” if using online bill payment), to actually writing the check.
4. Open a Lemonade Stand
Helping your child set up a lemonade stand can be a great way for him or her to learn several valuable lessons including working to earn money, making change, costs versus earnings, profits, and what they can do with their earnings (save some, spend some, save all, etc). Take your child with you to purchase the supplies, and be sure to keep the receipt so he or she can see how much it cost to run their lemonade stand versus how much they made. It also gives your wallet a short break since they won’t have to ask you for money!
5. Open a Savings Account
For older children, open a savings account. Be sure to take them to the bank with you when you open it, and let them see the statements that come in monthly. Take this opportunity to explain the basics behind earning interest. Encourage your child to put money they earn into their savings account. You can even offer to match what they put in. When you feel your child is ready, move on to a checking account.
6.Take Advantage of Board Games, Computer Games, Apps and Learning Websites
Make learning about money fun by playing games and apps and visiting learning websites. The Game of Life and Monopoly are two excellent ways to enrich your child’s learning experience. There are also plenty of online games and apps they can play to learn about money. Some of my favorites include: Peter Pig’s Money Counter (app; ages 4 to 7), Money Metropolis (app; ages 7 to 12), Kids Money (iOS), Save! The Game (iOS), Make Change (iOS), Orange Kids (website, ages 4 to 7), Three Jars (website ages 8 to 12).
7. Read Books About Money
Kids are never too old to enjoy a good story, and there are plenty out there about money. Some of my favorites include: Money Mama & The Three Little Pigs by Lori Mackey, Bunny Money by Rosemary Wells, The Money Tree by Dave Hunt, Lunch Money by Andrew Clements, Follow the Money by Loreen Leedy, and Alexander, Who Used to Be Rich Last Sunday by Judith Viorst.
8. Use Regular Spending as Lessons
Just like you did when your child was a preschooler, continue to expose him or her to your everyday spending, but now you can begin to give them a bit of responsibility. For example, when planning your grocery store trip, sit down with your child and let them help you make the grocery list. Explain that you have this amount of money to spend in order to get these items. Clip coupons together to teach thriftiness. When at the store, hand your child the money and let them figure out the correct amount to give to pay. For younger children start out by letting them pay for the change part of the bill (eg: the total is $37.59, let them count out the .59 cents), then as they get older and learn more, let them figure out the best way to pay for the total amount. You can also make a game out of it. Give your child a set amount of money and challenge them to get as many items from a list as they can. This is a fun way for them to learn how to spend wisely, look for the best prices and find bargains!
9. Give Your Child a Budget
We all know that what young kids want the most are toys, toys and more toys. Instead of making several trips to the toy store per month, give your child a budget. Set it at $10, $20 or whatever works best for you. Then, let them decide how to spend the money. This is a great way to teach several lessons such as taking care of what we own, what happens when we don’t have enough money to get what we want, wants versus needs, and many more!
10. Set Up ways to Let Your Kids Earn Money
The best way for kids to learn about money is by interacting with it. But young children cannot just go out and get a job, and just handing your child money every time they ask for it teaches the wrong lesson. Children need to learn that money is earned. Therefore, set up age appropriate “jobs” for your child where they can earn some money. This can be anything from carrying the groceries in, to washing the car, to walking the dogs. Whatever you feel is appropriate.